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UNITED STATES
SECURITIES AND
EXCHANGE
COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
 
 
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h
e Registrant   
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  Preliminary Proxy Statement
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14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Under Rule
240.14a-12
Capital One Financial Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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LOGO

Proxy Statement 2023 Capital One


LOGO

Notice of Capital One Financial Corporation’s

2023 Annual Stockholder Meeting

Important Notice Regarding the Availability of Proxy Materials for

the Stockholder Meeting to be held on May 4, 2023

The Proxy Statement and Annual Report to Stockholders are available at www.proxyvote.com

The 2023 Annual Stockholder Meeting of Capital One Financial Corporation (“Capital One” or “Company”) will be held at Capital One’s campus at 1680 Capital One Drive, McLean, Virginia 22102 on May 4, 2023, at 10:00 a.m. Eastern Time.

Items of Business

As a stockholder, you will be asked to:

 

1.

 

Elect twelve nominated directors, who are listed in the proxy statement, as directors of Capital One;

2.

 

Approve amendments to Capital One Financial Corporation’s Restated Certificate of Incorporation to remove remaining supermajority voting requirements and references to Signet Banking Corporation;

3.

 

Approve, on a non-binding advisory basis, the frequency with which Capital One will hold an advisory vote to approve our Named Executive Officer compensation (“Say When on Pay”);

4.

 

Approve, on a non-binding advisory basis, our Named Executive Officer compensation (“Say on Pay”);

5.

 

Approve and adopt the Capital One Financial Corporation Seventh Amended and Restated 2004 Stock Incentive Plan;

6.

 

Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for 2023; and

   7  9.

 

Consider stockholder proposals, if properly presented at the meeting.

Stockholders also will transact other business that may properly come before the meeting.

Record Date

You may vote if you held shares of Capital One common stock as of the close of business on March 8, 2023 (“Record Date”).

Proxy Voting

Your vote is important. You may vote your shares in advance of the meeting via the Internet, by telephone, by mail, or in person at the 2023 Annual Stockholder Meeting. Please refer to the section “How do I vote?” in the proxy statement for detailed voting instructions. If you vote via the Internet, by telephone or plan to vote in person during the 2023 Annual Stockholder Meeting, you do not need to mail in a proxy card.

2023 Annual Stockholder Meeting Admission

Due to space limitations, attendance is limited to stockholders and persons holding valid legal proxies from those stockholders. Admission to the meeting is on a first-come, first-served basis. Registration will begin at 9:00 a.m. Eastern Time. Valid government-issued identification must be presented to attend the meeting. If you hold Capital One common stock through a broker, bank, trust or other nominee, you must bring a copy of a statement reflecting your stock ownership as of the Record Date, and if you wish to vote in person, you must also bring a legal proxy from your broker, bank, trust or other nominee. Cameras, recording devices, and other electronic devices are not permitted. If you require special assistance at the meeting, please contact the Corporate Secretary at 1600 Capital One Drive, McLean, VA 22102.

We look forward to seeing you at the meeting.

On behalf of the Board,

Matthew W. Cooper

Corporate Secretary

March [    ], 2023


Proxy Summary

 

 

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information you should consider in voting your shares. Please read the complete proxy statement and our Annual Report to Stockholders for the fiscal year ended December 31, 2022 (“Annual Report”) carefully before voting.

 

 Meeting Information

 

  Date:

  

 

Thursday, May 4, 2023

 

  Time:

  

 

10:00 a.m. Eastern Time

 

  Location:

  

 

1680 Capital One Drive, McLean, Virginia 22102

 

  Record Date:

  

 

March 8, 2023

 

 How to Vote

Your vote is important. You may vote your shares in advance of the meeting via the Internet, by telephone, by mail, or in person at the 2023 Annual Stockholder Meeting. Please refer to the section “How do I vote?” on page 156 for detailed voting instructions. If you vote via the Internet, by telephone, or plan to vote in person at the 2023 Annual Stockholder Meeting, you do not need to mail in a proxy card.

 

INTERNET  

TELEPHONE

 

MAIL

 

IN PERSON

     
LOGO  

LOGO

 

LOGO

 

LOGO

     

Visit www.proxyvote.com.

You will need the control

number printed on your

notice, proxy card, or voting

instruction form.

 

If you received a paper copy of the proxy materials, dial toll-free (1-800-690-6903) or use the telephone number on your voting instruction form. You will need the control number printed on your proxy card or voting instruction form.

 

If you received a paper copy of

the proxy materials, send your

completed and signed proxy

card or voting instruction form

using the enclosed postage-

paid envelope.

 

Follow the instructions under “Can I attend the 2023 Annual Stockholder Meeting?” on page 155 and request a ballot when you arrive at the meeting.

On March [    ], 2023, we began sending our stockholders a Notice Regarding the Internet Availability of Proxy Materials (“Notice”).

 

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT  

 

    1

 


Voting Item 1: Election of Directors

 

 
    Item 1      

You are being asked to elect the following twelve candidates for director: Richard D. Fairbank, Ime Archibong, Christine Detrick, Ann Fritz Hackett, Peter Thomas Killalea, Cornelis Petrus Adrianus Joseph (“Eli”) Leenaars, François Locoh-Donou, Peter E. Raskind, Eileen Serra, Mayo A. Shattuck III, Bradford H. Warner, and Craig Anthony Williams. Each director nominee is standing for election to hold office until our next annual stockholder meeting or until their successor is duly elected and qualified. For additional information regarding our director nominees, see “Our Director Nominees” beginning on page 14 and “Skills and Experience of Our Director Nominees” beginning on page 22 of this proxy statement. For a description of our corporate governance practices, see “Corporate Governance at Capital One” beginning on page 24 of this proxy statement.

 

  Our Board unanimously recommends that you vote “FOR” each of these director nominees.

Corporate Governance Highlights

 

 

Board Members and Leadership

 

Board Governance Best Practices

 

   Eleven of our twelve director nominees are independent; our Chief Executive Officer (“CEO”) and founder is the only member of management who serves as a director

 

   Appointment of seven new independent directors in the last five years, six of whom are current nominees

 

   Active and empowered Lead Independent Director elected annually by the independent members of our Board (“Independent Directors”)

 

   Active and empowered committee chairs, all of whom are independent

 

   Directors have a mix of tenures, including long-standing members, relatively new members, and others at different points along the tenure continuum

 

   Directors reflect a variety of experiences and skills that match the Company’s complexity and strategic direction and give the Board the collective capability necessary to oversee the Company’s activities

 

   Regular discussions regarding Board recruiting, succession, and refreshment, including director skills and qualifications, that support the Company’s long-term strategic objectives

 

 

 

   Frequent executive sessions of the Independent Directors that regularly include separate meetings with our CEO, Chief Financial Officer (“CFO”), General Counsel and Corporate Secretary, Chief Risk Officer, Chief Audit Officer, Chief Information Security Officer, Chief Technology Risk Officer, Chief Credit Review Officer, and/or Chief Compliance Officer

 

   Annual assessments of the Board and each of its committees, the Independent Directors, and the Lead Independent Director

 

   Active engagement and oversight of Company strategy; risk management (including technology risk management); the Company’s political activities and contributions; and environmental, social, and governance matters

 

   Direct access by the Board to members of management

 

   Annual CEO evaluation process led by the Lead Independent Director

 

   Regular talent and succession planning discussions regarding the CEO and other key executives

 

   Regular meetings between the Board and federal banking regulators

 

 

2  

 

     

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT

 


 

Stockholder Engagement and Stockholder Role in Governance

 

   Regular outreach and engagement throughout the year by our CEO, CFO, and Investor Relations team with stockholders regarding Company strategy and performance

 

   Formal outreach and engagement with governance representatives of our largest stockholders at least two times per year

 

   Feedback from investors regularly shared with our Board and its committees to ensure that our Board has insight on investor views

   Board and Governance and Nominating Committee review extensive briefings and benchmarking reports on corporate governance practices and emerging corporate governance issues

 

   Majority voting for directors with resignation policy in uncontested elections

 

   Stockholders holding at least 25% of outstanding common stock may request a special meeting

 

   Stockholders are able to act by written consent, subject to certain procedural and other safeguards that the Board believes are in the best interests of Capital One and our stockholders

 

   Stockholders holding 3% of outstanding common stock for three years can nominate director candidates for inclusion in our proxy materials

 

   No supermajority vote provisions for removal of a director from office or amendments to Bylaws and Certificate of Incorporation (other than in Article IX of the Certificate of Incorporation related to Certain Business Combinations)

 

   No stockholder rights plan (commonly referred to as a “poison pill”)

Voting Item 2: Approval of Amendments to Capital One Financial Corporation’s Restated Certificate of Incorporation to Remove Remaining Supermajority Voting Requirements and References to Signet Banking Corporation

 

 
    Item 2      

 

You are being asked to approve a management proposal to amend Capital One Financial Corporation’s Restated Certificate of Incorporation to remove remaining supermajority voting requirements and references to Signet Banking Corporation. For additional information regarding the proposal, see “Approval of Amendments to Capital One Financial Corporation’s Restated Certificate of Incorporation to Remove Remaining Supermajority Voting Requirements and References to Signet Banking Corporation” beginning on page 57 of this proxy statement.

 

  Our Board unanimously recommends that you vote “FOR” the amendments to Capital One Financial Corporation’s Restated Certificate of Incorporation as disclosed in this proxy statement.

 

Voting Item 3: Advisory Vote on Frequency of Holding an Advisory Vote to Approve Our Named Executive Officer Compensation (“Say When On Pay”)

 

 
    Item 3      

 

You are being asked to approve, on an advisory basis, the frequency of holding an advisory vote to approve the compensation of our named executive officers (“NEOs”).

 

  Our Board unanimously recommends that you vote “EVERY YEAR” for conducting future advisory votes to approve NEO compensation.

 

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT  

 

    3

 


Voting Item 4: Advisory Vote on Our Named Executive Officer Compensation (“Say on Pay”)

 

 
    Item 4      

 

You are being asked to approve, on an advisory basis, the compensation of our NEOs. For additional information regarding our executive compensation program and our NEO compensation, see “Compensation Discussion and Analysis” beginning on page 78 and “Named Executive Officer Compensation” beginning on page 120 of this proxy statement.

 

  Our Board unanimously recommends that you vote “FOR” the advisory approval of our 2022 NEO Compensation as disclosed in this proxy statement.

Our executive compensation program is designed to attract, retain, motivate, and reward leaders who can foster strong business results and promote our long-term success. We believe our executive compensation program strongly links rewards with both business and individual performance over multiple time horizons. We aim to align our executives’ interests with those of our stockholders while supporting safety and soundness and appropriately balancing risk.

2022 Company Performance

Each year the Compensation Committee (“Committee”) and the Independent Directors review and evaluate the Company’s qualitative and quantitative performance to make determinations regarding the compensation of our NEOs based on Capital One’s pay-for-performance philosophy. The Committee seeks to directly link the compensation of the NEOs with the Company’s performance and the executives’ contributions to that performance over multiple time horizons.

In 2022, Capital One delivered very strong financial results and made significant progress on our long-term strategic initiatives. We made long-term investments in transformation, talent, technology and digital capabilities, and risk management. Double-digit revenue growth, sound through-cycle underwriting, and strong credit performance drove near-record profitability, allowing the Company to invest for the future, distribute significant capital to stockholders, and maintain a strong balance sheet. Each of our major lines of business delivered solid growth and returns. Our Domestic Card business delivered very strong revenue growth, enabled by the increase in credit card loan balances and strong new accounts and record purchase volume. We continued to expand our national Consumer Bank franchise with 5.5% deposit growth, and we fully implemented our elimination of overdraft fees for our consumer banking customers, saving these customers hundreds of millions of dollars. Our Auto Finance and Commercial Bank businesses also delivered solid growth and returns while navigating an evolving competitive and economic environment.

Operating expenses increased, driven by economic factors, growth, and our continued investments in technology and talent. Our operating efficiency ratio(1)(2) improved 79 basis points to 44.2%, as revenue outpaced operating expense growth. Adjusted operating efficiency ratio(1)(3) improved slightly to 44.5%. We increased marketing investments by $1.1 billion, or 40%, as we took advantage of opportunities to welcome new customers, deepen existing relationships, and grow our consumer franchises. As a result, our total efficiency ratio(1)(2) increased 151 basis points to 56.0% and our adjusted total efficiency ratio(1)(3) increased to 56.3%.

Diluted earnings per share (“EPS”) was $17.91, driven by revenue growth and strikingly strong credit. EPS was down from 2021 but the second-highest level in Capital One’s history and well above pre-pandemic levels of total and per share profitability. We distributed significant capital to stockholders, as we completed $4.8 billion in common share repurchases and paid $954 million in common dividends. After significantly outperforming banks and the broader market in 2021, Capital One shares ended 2022 at $92.96, down 35.9% from year end 2021 and below the KBW Bank Index which was down 23.7%. Valuations and stock price performance for the banking sector, and for large consumer lenders specifically, came under pressure in 2022, primarily due to economic uncertainty and stock market volatility.

 

4  

 

     

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT

 


In 2022, Capital One launched new products, signed new partners, and continued to reimagine the customer experience. We earned a number of external awards and accolades related to our products and customer experiences and continued to be recognized for our high levels of customer satisfaction and advocacy. Net Promoter Scores, which measure how likely our customers are to recommend Capital One products and services, remained extremely high across all of our major businesses. We continued to harness the operating, risk, and customer experience benefits of our migration to the public cloud, and are realizing cost benefits of our full exit from data centers in 2020. We also strengthened our risk and control environment and continued to enhance cybersecurity capabilities. After sustained investment and focus across the Company, the Office of the Comptroller of the Currency (“OCC”) formally closed Capital One’s cyber-related consent order.

In 2022, Capital One invested in recruiting, developing, and retaining talent. We welcomed thousands of new associates and have maintained strong associate morale and engagement. We continued to focus on our diversity and inclusion efforts, including record diverse representation of new executive hires and promotees as well as continued progress in diverse representation among campus and professional hire pipelines. In September 2022, we welcomed associates back to our offices in our hybrid working model and have realized recruiting, retention and productivity benefits from offering associates flexibility in how they balance in-office and virtual work. We also invested in the community through our Capital One Impact Initiative, and combined philanthropic support with skills-based associate volunteerism to serve and support nonprofits across our footprint.

We believe Capital One’s portfolio of structurally-attractive businesses, coupled with our long-term investments in talent, technology, and digital capabilities, positions us well to weather any potential economic stress while continuing to grow and create long-term stockholder value. In 2022, we realized the benefits of these investments while continuing to position the Company for long-term competitiveness and success. In particular, the Committee and the Independent Directors specifically considered the following quantitative and qualitative Company performance when awarding compensation for the 2022 performance year to our NEOs(1):

 

   

Net Revenue of $34.3 billion, an increase of 12.5% from 2021, driven by strong loan growth, particularly in Domestic Card. Our 2022 revenue growth rate was our highest organic growth rate since 2002.

 

   

EPS of $17.91, a decrease of 34% from 2021, but the second-highest level in the company’s history and 62% higher than pre-pandemic 2019 EPS.

 

   

ROTCE(4) was 19.9% compared to 28.4% in 2021.

 

   

Operating Efficiency Ratio(2) of 44.2% in 2022 compared to 45.0% in 2021. Adjusted operating efficiency ratio(1)(3) was 44.5% in 2022, a slight improvement from 44.7% in 2021, as we delivered very strong revenue growth and continued to invest in growth, technology and talent.

 

   

Total Efficiency Ratio(2) of 56.0% in 2022, an increase from 54.4% in 2021, the result of higher marketing expenses as we took advantage of attractive market opportunities to drive new accounts and grow our consumer franchises. Adjusted total efficiency ratio(1)(3) was 56.3% in 2022 compared to 54.1% in 2021.

 

   

Credit Risk Management. Our net charge-off rate was 1.36%, up from a record low of 0.88% in 2021, but still strong as compared to historic trends. The net charge-off rate in our Domestic Card business was 2.5%, well below pre-pandemic levels but continuing to normalize. We built our allowance for credit losses to support loan growth and reflect modest economic worsening.

 

   

Continued Balance Sheet Strength with strong liquidity and total deposits of $333 billion, up 7.1% from 2021. Our common equity Tier 1 capital ratio(5) ended 2022 at 12.5%, down from 13.1% in 2021 but comfortably above regulatory guidelines and management’s long-term target.

 

   

Tangible Book Value Per Share(6) was $86.11, down 13.7% from $99.74 in 2021, primarily due to valuation impacts to our investment portfolio primarily based on significant changes to market interest rates. We returned $5.8 billion of capital to stockholders through both common dividends and share repurchases.

 

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT  

 

    5

 


   

Total Shareholder Return (“TSR”). Our TSR of -34.6% underperformed our peer comparator group, which dropped 19%, and the KBW Bank Index, which decreased 21.4%, for the one-year period ended December 31, 2022. Our three-year and five-year TSR for the periods ended December 31, 2022 was -5.0%, and 1.7%, respectively, moderately underperforming our peer comparator group but outperforming the KBW Bank Index, which was -11.0% and 5.5% over the same time periods, respectively.

 

   

Execution Against Strategic Imperatives. We continued to make significant but disciplined investments to modernize our infrastructure and data tools, scale our applications and digital capabilities, and attract, develop, and retain top talent in order to support our technology transformation. In 2022, we continued to realize the strategic, financial, operational, and customer benefits of our modern tech stack and the full exit from our data centers. We invested in our brand through bold advertising and mass-customized digital marketing. We enhanced our product offerings–including innovative consumer and small business credit cards–and reimagined our businesses and digital customer tools including a number of premium products and experiences.

 

   

Risk Management and Control Environment. We invested in technology, talent, and business process improvement as we strengthened our risk and control environment, particularly in the areas of cybersecurity, capital planning, and enterprise risk management. After sustained investment and focus across the Company, the OCC formally closed Capital One’s cyber-related consent order.

 

   

Implementation of Elimination of Overdraft Fees. In 2021, we became the first top-ten retail bank to provide free overdraft protection and eliminate all overdraft and non-sufficient funds fees for all consumer banking customers. In 2022, we fully implemented these policies and features, saving our customers hundreds of millions of dollars.

 

   

Progress on ESG Initiatives. We continued to make progress on ESG initiatives in 2022, including the publication of our inaugural ESG Report in September. In 2022, we worked to gain a deeper understanding of the key business drivers and leverage points that impact our operational emissions. This analysis is helping to align our action plans with continued progress towards our greenhouse gas (“GHG”) emissions reduction goals, while also building the foundation to evaluate potential future reductions in these emissions. In addition, as part of our five-year, $200 million Impact Initiative commitment, we facilitated over $70 million in grants to local, regional, and national non-profits, building our reputation with external stakeholders, and helping advance socioeconomic mobility in our communities. See “Environmental, Social, and Governance Practices” beginning on page 48 for more information regarding our policies, programs and strategies related to ESG and our 2022 accomplishments.

See “Executive Summary” beginning on page 79 and “Year-End Incentive Opportunity” beginning on page 93 for more information regarding the Company’s 2022 performance.

 

(1)

The Committee considers these metrics to be key financial performance measures in its assessment of the Company’s performance, including certain non-GAAP measures. While we believe certain of our non-GAAP measures help investors, and users of our financial information understand the effect of adjusting items on our selected reported results, they may not be comparable to similarly-titled measures reported by other companies. See Appendix A for our definition and reconciliation of these non-GAAP measures to the applicable amounts measured in accordance with GAAP.

 

(2)

Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period and reflects as-reported results in accordance with GAAP. Total efficiency ratio is calculated based on total non-interest expense for the period divided by total net revenue for the period and reflects as-reported results in accordance with GAAP.

 

(3)

Adjusted operating efficiency ratio and adjusted total efficiency ratio are non-GAAP measures. See Appendix A for our reconciliation of the non-GAAP measure to the applicable amount measured in accordance with GAAP.

 

(4)

ROTCE is a non-GAAP measure calculated based on net income (loss) available to common stockholders less income (loss) from discontinued operations, net of tax, for the period, divided by average tangible common equity. See Appendix A for our definition and reconciliation of this non-GAAP measure to the applicable amounts measured in accordance with GAAP.

 

(5)

Common equity Tier 1 capital ratio is a regulatory capital measure under the Basel III capital rules calculated based on common equity Tier 1 capital divided by risk-weighted assets under the standardized approach framework.

 

(6)

Tangible book value per share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See Appendix A for our definition and reconciliation of this non-GAAP measure to the applicable amounts measured in accordance with GAAP.

 

6  

 

     

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT

 


Highlights of Our 2022 Compensation Programs

We believe that our NEO compensation programs balance risk and financial results, reward NEOs for their achievements, promote our overall compensation objectives, and encourage appropriate, but not excessive, risk-taking. Our compensation programs are structured to encourage our executives to deliver strong results over the short term while making decisions that create sustained value for our stockholders over the long term. Key features of our 2022 compensation programs include:

 

   

No CEO Cash Salary. Our CEO does not receive a cash salary and 100% of his compensation is deferred for at least three years.

 

   

The Payout of 70% of CEO Year-End Incentive Compensation Determined by Formula. 70% of our CEO’s year-end incentive compensation for the 2022 performance year was awarded in the form of performance share awards that vest based entirely on the Company’s performance on an absolute basis and/or relative to the Company’s peers in the KBW Bank Index, excluding five non-traditional banks that do not focus on lending to consumers and businesses (the “Performance Share Peers”), over a three-year period.

 

   

25% of CEO 2022 Performance Share Awards Linked to TSR. A portion of our CEO year-end incentive performance share awards will vest based entirely on the Company’s TSR performance relative to the Performance Share Peers over a three-year period.

 

   

Awards Based on Company and Individual Performance. All NEOs receive incentive awards based on Company and/or individual performance. For 2022, 100% of CEO compensation and approximately 82% of the compensation for the other NEOs was based on Company and/or individual performance.

 

   

NEO Compensation is Primarily Equity-Based and Determined after Performance Year-End. 84% of our CEO’s and approximately 51% of all other NEOs’ total compensation for the 2022 performance year was equity-based to align with stockholder interests. 90% of CEO compensation and the majority of all other NEO compensation was determined after the performance year-end, allowing the Board to consider a full year of Company and individual performance.

 

   

All Equity and Equity-Based Awards Contain Performance and Recovery Provisions. All equity awards contain performance and recovery provisions that are designed to further enhance alignment between pay and performance and to balance risk. See “Additional Performance Conditions and Recovery Provisions” beginning on page 111 for more information.

2022 Compensation Decisions

2022 CEO Performance Year Compensation

The CEO’s compensation for the 2022 performance year was composed of an equity award designed to provide the CEO with an incentive to focus on long-term performance and the opportunity for a year-end incentive award based on the Committee’s evaluation of the Company’s performance and the CEO’s contributions to that performance. Mr. Fairbank’s total compensation for performance year 2022 was approximately $26.13 million and consisted of:

 

   

Restricted Stock Units (“RSUs”) granted in February 2022, which had a total grant date value of approximately $2.50 million, totaling 16,859 RSUs. The RSUs will vest in full on February 15, 2025, settle in cash based on the Company’s average stock price over the 15 trading days preceding the vesting date, and are subject to performance-based vesting provisions.

 

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT  

 

    7

 


   

Year-End Incentive Award totaling approximately $23.63 million granted in January 2023 in recognition of the Company’s performance and the CEO’s contribution to that performance in 2022 and consisting of:

 

   

Performance Share Units. Performance share unit awards with an aggregate value of approximately $16.53 million, for which the CEO may receive from 0% to 150% of a total target number of 142,372 shares of the Company’s common stock based on the Company’s TSR (with respect to 35,539 shares, or approximately $4.13 million of the awards) and financial performance (with respect to 106,833 shares, or $12.40 million of the awards) over a three-year period from January 1, 2023 through December 31, 2025.

 

   

RSUs. 24,555 cash-settled RSUs (“Year-End Incentive RSUs”) valued at $2.85 million, which vest in full on February 15, 2026, settle in cash based on the Company’s average stock price over the 15 trading days preceding the vesting date, and are subject to performance-based vesting provisions.

 

   

Deferred Cash Bonus. A deferred cash bonus of $4.25 million, which is mandatorily deferred for three years into the Company’s Voluntary Non-Qualified Deferred Compensation Plan (“VNQDCP”) and will pay out in the first calendar quarter of 2026.

The chart below shows Mr. Fairbank’s actual total compensation for performance year 2022:

 

 

LOGO

The table below shows Mr. Fairbank’s compensation awards as they are attributable to the performance years indicated. The table shows how the Committee views compensation actions and to which year the compensation awards relate. This table differs substantially from the Summary Compensation Table and Pay Versus Performance table required for this proxy statement beginning on page 120 and page 136, respectively, and is therefore not a substitute for the information required in those tables. See “Chief Executive Officer Compensation” beginning on page 91 for a description of the compensation paid to our CEO and “2022 CEO Compensation Program and Components” beginning on page 91 for additional information regarding Mr. Fairbank’s 2022 performance year compensation.

 

Performance
Year
      Cash    
 Salary     
       Long-Term Incentive           Year-End Incentive            Total    
   Cash-Settled RSUs           Deferred    
Cash    
Bonus    
      Cash-    
Settled    
RSUs    
      Performance    
Shares(1)    

2022

    $—          $2,500,021         $4,250,000         $2,850,099         $16,525,118          $26,125,238    

2021

    $—          $1,750,060         $4,550,000         $3,000,055         $18,200,225          $27,500,340    

2020

    $—          $1,750,070         $3,000,000         $2,000,053         $12,000,093          $18,750,216    

 

8  

 

     

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT

 


 

(1)

For 2022, approximately $4.13 million of the awarded performance shares will vest based on the Company’s TSR performance relative to the Performance Share Peers over a three-year period. Approximately $12.40 million of the awarded performance shares will vest based on the Company’s relative and absolute financial performance over a three-year period. For 2021, $4.55 million of the awarded performance shares will vest based on the Company’s TSR performance relative to the Performance Share Peers over a three-year period. $13.65 million of the awarded performance shares will vest based on the Company’s relative and absolute financial performance over a three-year period. For 2020, $3.00 million of the awarded performance shares will vest based on the Company’s TSR performance relative to the Performance Share Peers over a three-year period. $9.00 million of the awarded performance shares will vest based on the Company’s relative and absolute financial performance over a three-year period. See “Performance Share Award Metrics” beginning on page 94 for a description of the metrics applicable to the performance shares.

2022 NEO Performance Year Compensation

NEO (other than the CEO) compensation for the 2022 performance year was composed of a mix of cash and equity-based compensation and consisted of (i) a base salary and (ii) an annual year-end incentive opportunity which consisted of a cash incentive and a long-term incentive opportunity. The long-term incentive opportunity was comprised of performance shares and stock-settled RSUs as determined by the Committee and the Independent Directors. The chart below shows the elements of NEO compensation as an approximate percentage of NEO 2022 actual total compensation:

 

 

LOGO

See “NEO Compensation” beginning on page 106 for a description of compensation to the NEOs (other than the CEO).

Say on Pay and Response to Stockholder Feedback

The Committee and the Board value the input of our stockholders. At our 2022 Annual Stockholder Meeting, approximately 94% of our stockholders supported our NEO compensation. See “Consideration of Stockholder Feedback and 2022 Say on Pay Vote” beginning on page 86 for additional information regarding our Say on Pay vote.

In recent years, in response to feedback received from our stockholders, the Committee and the Independent Directors have made significant improvements to our executive compensation program, practices, and disclosures. The changes aim to simplify the program structure, further align our executive compensation practices with best practices and principles and enhance the transparency of our disclosures.

 

   

Linked a Portion of CEO Compensation Directly to TSR. The Committee and the Independent Directors determined to award a portion of the CEO’s year-end incentive in the form of a performance share award that vests entirely based on the Company’s TSR over a three-year performance period relative to the Performance Share Peers.

 

   

Disclosure of Performance Share Awards Realized Compensation. We added disclosure regarding the settlement value resulting from the performance share awards that vested during the performance year based on the Company’s performance for the associated three-year performance period. See “Settlement of Performance Shares Granted in January 2020” on page 104.

 

CAPITAL ONE FINANCIAL CORPORATION  

 

 

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    9

 


   

Enhanced Disclosure of Compensation Committee Decision Processes. We enhanced the description of the Committee and the Independent Directors processes for considering Company performance throughout the year and determining the level and pay mix associated with the year-end incentive awards granted to our NEOs. See “Our Compensation Governance Cycle” on page 90 and “Compensation Committee Process to Determine Year-End Incentive” on page 97.

 

   

Increased the Size and Diversity of Our Peer Group. The Committee and the Independent Directors increased the size and diversity of the Company’s peer group used to determine the level and components of NEO compensation to add seven additional peers, including diversified financial institutions and payment companies with whom we compete for executive talent. See “Peer Groups” beginning on page 115 for more information.

Voting Item 5: Approval and Adoption of the Capital One Financial Corporation Seventh Amended and Restated 2004 Stock Incentive Plan

 

 
    Item 5      

 

You are being asked to approve and adopt the Capital One Financial Corporation Seventh Amended and Restated 2004 Stock Incentive Plan. For additional information regarding the proposal, see “Approval and Adoption of the Capital One Financial Corporation Seventh Amended and Restated 2004 Stock Incentive Plan” beginning on page 66 of this proxy statement.

 

  Our Board unanimously recommends that you vote “FOR” the approval and adoption of our Seventh Amended and Restated 2004 Stock Incentive Plan as disclosed in this proxy statement.

 

Voting Item 6: Ratification of Selection of Our Independent Registered Public Accounting Firm

 

 
    Item 6      

 

You are being asked to ratify the Audit Committee’s selection of Ernst & Young LLP as our independent registered public accounting firm for 2023. For additional information regarding the Audit Committee’s selection of and the fees paid to Ernst & Young LLP, see “Audit Committee Report” on page 146 and “Ratification of Selection of Our Independent Registered Public Accounting Firm” beginning on page 144 of this proxy statement.

 

  Our Board unanimously recommends that you vote “FOR” the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for 2023.

 

Voting Items 7-9: Stockholder Proposals

 

 
    Items 7-9      

 

You are being asked to vote on three stockholder proposals. For additional information regarding the proposals, see “Stockholder Proposals” beginning on page 147 of this proxy statement.

 

  Our Board unanimously recommends that you vote “AGAINST” the three stockholder proposals as disclosed in this proxy statement.

 

 

10  

 

     

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT

 


Table of Contents

 

 

CORPORATE GOVERNANCE

Section I - Election of Directors (Item 1 on Proxy Card)

  13

Our Director Nominees

  14

Skills and Experience of Our Director Nominees

  22

Section II - Corporate Governance at Capital One

  24

Overview of Corporate Governance at Capital One

  24

Board Leadership Structure

  24

Key Board Governance Practices

  27

The Board’s Role in Corporate Oversight

  33

Stockholder Engagement

  37

Board Committees

  41

Executive Officers

  44

Related Person Transactions

  47

Environmental, Social, and Governance Practices

  48

How to Contact Us

  56

Section III - Approval of Amendments to Capital One Financial Corporation’s Restated Certificate of Incorporation to Remove Remaining Supermajority Voting Requirements and References to Signet Banking Corporation (Item 2 on Proxy Card)

  57

Section IV - Director Compensation

  60

Director Compensation Objectives

  60

Director Compensation Procedures

  60

Director Compensation Structure

  60

Other Benefits

  61

Compensation of Directors

  62

Stock Ownership Requirements

  63

EXECUTIVE COMPENSATION

Section V - Advisory Vote on Frequency of Holding an Advisory Vote to Approve Our Named Executive Officer Compensation (“Say When On Pay”) (Item 3 on Proxy Card)

  64

Section VI - Advisory Vote on Our Named Executive Officer Compensation (“Say On Pay”) (Item 4 on Proxy Card)

  65

 

Section VII - Approval and Adoption of the Capital One Financial Corporation Seventh Amended and Restated 2004 Stock Incentive Plan (Item 5 on Proxy Card)

  66

Section VIII - Compensation Discussion and Analysis

  78

Executive Summary

  79

Our Compensation Principles and Objectives

  88

Our Compensation Governance Cycle

  90

Chief Executive Officer Compensation

  91

NEO Compensation

  106

Additional Performance Conditions and Recovery Provisions

  111

Process and Criteria for Compensation Decisions

  114

Other Compensation Arrangements

  116

Other Aspects of Executive Compensation

  117

Section IX - Named Executive Officer Compensation

  120

2022 Summary Compensation Table

  120

2022 Grants of Plan-Based Awards

  122

2022 Grants of Plan-Based Awards Table

  124

2022 Option Exercises and Stock Vested Table

  125

2022 Outstanding Equity Awards at Fiscal Year-End Table

  126

Pension Benefits

  127

2022 Pension Benefits Table

  128

Capital One’s Voluntary Non-Qualified Deferred Compensation Programs

  128

2022 Non-Qualified Deferred Compensation Table

  129

Potential Payments Upon Termination or Change of Control

  129

2022 Potential Payments and Benefits Upon Termination or Change of Control Table

  134

Estimated Ratio of CEO Compensation to Median Employee Compensation

  135

Pay versus Performance

  136

Pay versus Performance Table

  136
 

 

CAPITAL ONE FINANCIAL CORPORATION  

 

 

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TABLE OF CONTENTS

 

 

Section X - Equity Compensation Plans

  139

Equity Compensation Plan Information

  139

1999 Directors Plan

  139

Section XI - Security Ownership

  140

Security Ownership of Certain Beneficial Owners

  140

Security Ownership of Directors and Named Executive Officers

  141

Delinquent Section 16(a) Reports

  142

Section XII - Compensation Committee Report

  143

AUDIT MATTERS

Section XIII - Ratification of Selection of Our Independent Registered Public Accounting Firm (Item 6 on Proxy Card)

  144

Section XIV - Audit Committee Report

  146

STOCKHOLDER PROPOSALS

Section XV - Stockholder Proposals (Items 7-9 on Proxy Card)

  147

OTHER MATTERS

Section XVI - Other Business

  154

Other Business

  154

Annual Report to Stockholders

  154

Stockholder Proposals for 2024 Annual Stockholder Meeting

  154

Section XVII - Frequently Asked Questions

  155

Appendix A - Information Regarding Non-GAAP Financial Measures

  160

Appendix B - Proposed Amendments to Capital One Financial Corporation’s Restated Certificate of Incorporation

  162

Appendix C - Capital One Financial Corporation Seventh Amended and Restated 2004 Stock Incentive Plan

  164

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this proxy statement may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on the Form 10-K for the year ended December 31, 2022 (“Form 10-K”).

This proxy statement also contains statements regarding environmental, social, and governance commitments, goals, and metrics. Such statements are not guarantees or promises that such metrics, goals or commitments will be met and are based on current strategy, assumptions, estimates, methodologies, standards, and currently available data, which continue to evolve and develop.

No reports, documents, or websites that are cited or referred to in this proxy statement shall be deemed to be incorporated by reference into this document.

 

 

12  

 

     

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT

 


CORPORATE GOVERNANCE

 

    

 

Section I - Election of Directors (Item 1 on Proxy Card)

 

 

All of Capital One’s directors are elected at each annual stockholder meeting and hold such office until the next annual stockholder meeting, and until their successors are duly elected and qualified. Our Board is presenting the following twelve nominees for election as directors at the 2023 Annual Stockholder Meeting. Each nominee is a current Board member who was elected by stockholders at the 2022 Annual Stockholder Meeting. Each nominee has consented to serve a one-year term. Information about the proposed nominees for election as directors is set forth under “Our Director Nominees” beginning on page 14 of this proxy statement.

In the event a nominee becomes unable to serve or for good cause will not serve as a director, the Board may designate a substitute nominee or reduce the size of the Board. If the Board designates a substitute nominee, proxies will be voted for the election of such substitute. As of the date of this proxy statement, the Board has no reason to believe that any of the nominees will be unable or unwilling to serve as a director.

The nominees for election as directors at the 2023 Annual Stockholder Meeting are:

 

  Name     Age     Occupation     Director  
Since
    Independent     Other
Public
  Boards(1)  

Richard D. Fairbank

72

 

Chairman and Chief Executive Officer, Capital One Financial Corporation

 

1994 No 0

Ime Archibong

41

 

Head of New Product Experimentation, Meta

 

2021 Yes 0

Christine Detrick

64

 

Former Director, Head of the Americas Financial Services Practice; Former Senior Advisor, Bain & Company

 

2021 Yes 2

Ann Fritz Hackett

69

 

Former Strategy Consulting Partner

 

2004 Yes 2

Peter Thomas Killalea

55

 

Former Vice President of Technology, Amazon.com

 

2016 Yes 3

Eli Leenaars

61

 

Group Chief Operating Officer, Quintet Private Bank

 

2019 Yes 0

François Locoh-Donou

51

 

President, Chief Executive Officer, and Director, F5 Networks, Inc.

 

2019 Yes 1

Peter E. Raskind

66

 

Former Chairman, President and Chief Executive Officer, National City Corporation

 

2012 Yes 0

Eileen Serra

68

 

Former Senior Advisor, JP Morgan Chase & Co.; Former Chief Executive Officer, Chase Card Services

 

2020 Yes 2

Mayo A. Shattuck III

68

 

Former Chairman, Exelon Corporation;

 

Former Chairman, President and Chief Executive Officer, Constellation Energy Group

 

2003 Yes 1

Bradford H. Warner

71

 

Former President of Premier and Small Business Banking, Bank of America Corporation

 

2008 Yes 0

Craig Anthony Williams

 

53

 

President, Jordan Brand, Nike, Inc.

 

2021 Yes 0

 

(1)

Capital One’s Corporate Governance Guidelines limit the allowable board seats for our non-executive officer directors to four public company boards, including the Capital One Board, and for executive officer directors to two public company boards, including the Capital One Board.

***

The Board unanimously recommends that you vote “FOR” each of these director nominees.

 

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT  

 

    13

 


CORPORATE GOVERNANCE

 

Section I—Election of Directors (Item 1 on Proxy Card)

 

Our Director Nominees

Biographies of Director Nominees

 

 

LOGO

 

 Director Since:  1994

 

 Age:  72

 

 Capital One Committees:          

 

   None

 

 Additional Capital One
 Company:

 

   Capital One, N.A. (Chair)

 

  

Richard D. Fairbank

 

Chairman and Chief Executive Officer, Capital One Financial Corporation

 

Mr. Fairbank is the founder, CEO and Chairman of Capital One and one of just a few founder-CEOs among America’s largest public companies. Mr. Fairbank has been the CEO since Capital One’s initial public offering in November 1994 and has served as the Chairman since February 1995. After earning his undergraduate degree and MBA from Stanford University, Mr. Fairbank was a strategy consultant and advised leading companies on long-term business strategy and growth opportunities. He came up with the idea for Capital One in 1987, and left his consulting career to build it.

 

Mr. Fairbank’s vision and leadership have positioned Capital One as a leading data and technology company that has been recognized as one of the most cloud-forward companies in the world. The Company serves more than 100 million customers, has built an iconic and respected brand, and is consistently recognized for being one of the best places to work.

 

Mr. Fairbank has over three decades of experience in banking and financial services. As the founder and CEO of Capital One, he is knowledgeable about all aspects of the Company’s businesses, strategies, capabilities and culture. His qualifications as a Director include his deep understanding of Capital One and his broad range of skills in the areas of strategy, technology, risk management, talent, brand and shareholder engagement.

 

Additional Public Directorships:

 

   None

 

 

 

 

LOGO

 

 Director Since:  2021

 

 Age:  41

 

 Capital One Committees:          

 

   Compensation Committee

 

 Additional Capital One
 Company:

 

   Capital One, N.A.

 

  

Ime Archibong

 

Head of New Product Experimentation, Meta

 

Mr. Archibong is a seasoned product and business development technology executive. He has served as the Head of New Product Experimentation at Meta Platforms, Inc. (formerly known as Facebook, Inc.) since August 2019, where he leads an internal constituency of entrepreneurs testing new standalone experiences. From November 2010 to June 2020, Mr. Archibong served as Meta’s Vice President, Product Partnerships where he built the global team managing strategic partnerships with various constituencies including content developers, community leaders and not for profit organizations.

 

Prior to joining Meta, from February 2004 to October 2010, Mr. Archibong held roles of increasing responsibility at International Business Machines (IBM), including serving on the Advanced Technology Professional Business Development team focused on the future of storage, the Corporate Strategy team laying the foundation for IBM’s Smarter Cities initiative, and as a software engineer in the Systems and Technology Group.

 

Additional Public Directorships:

 

   None

 

 

 

14  

 

     

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT

 


CORPORATE GOVERNANCE

 

Section I—Election of Directors (Item 1 on Proxy Card)

 

 

 

 

 

 

LOGO

 

 

 Director Since:  2021

 

 Age:  64

 

 Capital One Committees:          

 

   Audit Committee

 

   Risk Committee

 

 Additional Capital One
 Company:

 

   Capital One, N.A.

 

  

Christine Detrick

 

Former Director, Head of the Americas Financial Services Practice; Former Senior Advisor, Bain & Company

 

Ms. Detrick is a financial services industry veteran with more than 35 years of senior operating and executive leadership experience. She has deep expertise in the banking and insurance industries across a wide array of sectors, including asset management, credit cards, property and casualty, and life insurance, payments, and other consumer finance segments. From 2002 until 2012, Christine Detrick was a Senior Partner, Leader of the Financial Services Practice, and a Senior Advisor at Bain & Company, a management consulting firm. Before joining Bain, she served for 10 years at A.T. Kearney, Inc., a management consulting firm, including as Leader of the Global Financial Institutions group and a member of the Board of Management and Board of Directors. At Bain and A.T. Kearney, Ms. Detrick served banks on issues of strategy, operational transformation, risk management, and technology.

 

Prior to those roles, she was a founding member of a venture capital firm specializing in savings and loan institution turnarounds and served as the chief executive officer of St. Louis Bank for Savings. She was also a consultant at McKinsey and Company earlier in her career. Ms. Detrick also serves on the board of Hartford Mutual Funds, a mutual fund company, as chairman of the board. She also serves as chairman of the board of Altus Power, a public clean energy company, and as a member of the board of Charles River Associates, a public management consulting company. She previously served on the board of directors of Forest City Realty Trust, a public real estate investment trust, as chair of the Compensation Committee and Reinsurance Group of America, a public reinsurance company, as chair of the Nominating and Governance Committee. She received her B.S. in Economics from the Wharton School of the University of Pennsylvania.

 

Additional Public Directorships:

 

   Altus Power America, Inc.

 

   CRA International, Inc.

 

 

 

 

LOGO

 

 

 Lead Independent Director

 

 Director Since:  2004

 

 Age:  69

 

 Capital One Committees:          

 

   Compensation Committee

 

   Governance and Nominating
      Committee (Chair)

 

   Risk Committee

 

 Additional Capital One
 Company:

 

   Capital One, N.A.

 

  

Ann Fritz Hackett

 

Former Strategy Consulting Partner

 

Ms. Hackett has extensive experience in leading companies that provide strategy and human resource consulting services to boards of directors and senior management teams. She has experience developing corporate and business strategy, leading change initiatives, risk management, talent management, and succession planning and in creating performance-based compensation programs, as well as significant international experience and technology experience. Ms. Hackett also has extensive board experience.

 

Ms. Hackett is a former Strategy Consulting Partner. From 2015 through January 2020 she was a Partner and Co-founder of Personal Pathways, LLC, a technology company providing a web-based enterprise collaboration insights platform to better advance high performance professional relationships and support the kind of complex problem-solving required in today’s distributed workplace. Prior to her role at Personal Pathways, she was President of Horizon Consulting Group, LLC, a firm founded by Ms. Hackett in 1996, providing global consumer product and service companies with innovative strategy and human capital initiatives. Prior to launching Horizon Consulting, Ms. Hackett spent 11 years at a leading national strategy consulting firm where she served as Vice President and Partner, served on the Management Committee, led Human Resources, and developed her expertise in strategy, change management, creating performance management processes and a performance-based culture, developing leadership talent, and planning for executive succession. Ms. Hackett is also a member of Tapestry Networks’ Lead Director Network, a select group of lead directors who collaborate on matters regarding board leadership. She also previously served as a director of Beam, Inc. (predecessor to Beam Suntory, Inc.) from December 2007 until April 2014.

 

Additional Public Directorships:

 

   Fortune Brands Innovations, Inc.

 

   MasterBrand, Inc.

 

 

CAPITAL ONE FINANCIAL CORPORATION  

 

 

  2023 PROXY STATEMENT  

 

    15

 


CORPORATE GOVERNANCE

 

Section I—Election of Directors (Item 1 on Proxy Card)

 

 

LOGO

 

 Director Since:  2016

 

 Age:  55

 

 Capital One Committees:

 

   Compensation Committee

 

   Risk Committee

 

 Additional Capital One
 Company:          

 

   Capital One, N.A.

 

  

Peter Thomas Killalea

 

Former Vice President of Technology, Amazon.com

 

Mr. Killalea, a seasoned technology executive and advisor, has deep expertise in product development, digital innovation, customer experience, and security. From November 2014 to December 2021, Mr. Killalea served as the Owner and President of Aoinle, LLC, a consulting firm. From May 1998 to November 2014, Mr. Killalea served in various senior executive leadership roles at Amazon, most recently as its Vice President of Technology for the Kindle Content Ecosystem. He led Amazon’s Infrastructure and Distributed Systems team, which later became a key part of the Amazon Web Services Platform. Prior to that, he served as Amazon’s Chief Information Security Officer and Vice President of Security.

 

Mr. Killalea also currently serves on the editorial board of ACM Queue (Association for Computing Machinery). He previously served on the board of Xoom Corporation (acquired by PayPal Inc.) from March 2015 to November 2015 and Carbon Black, Inc. (acquired by VMware) from April 2017 to October 2019.

 

Additional Public Directorships:

 

   Akamai Technologies, Inc.

 

   MongoDB, Inc.

 

   Satellogic, Inc.

 

 

 

LOGO

 

 Director Since:  2019

 

 Age:  61

 

 Capital One Committees:          

 

   Audit Committee

 

   Compensation Committee

 

   Risk Committee

 

 Additional Capital One
 Company:

 

   Capital One, N.A.

 

  

Eli Leenaars

 

Group Chief Operating Officer, Quintet Private Bank

 

Mr. Leenaars has over 30 years of experience in the financial services sector, including institutional and investment banking, asset management, corporate and retail banking, and in cultivating sophisticated client relationships. A respected expert on the future of digital banking, as well as global industry trends in finance, investment, banking, and leadership, Mr. Leenaars has experience managing businesses through a wide range of matters including mergers and acquisitions, complex corporate restructuring, strategic initiatives, and challenging financial environments.

 

Since June 2021, Mr. Leenaars has served as Group Chief Operating Officer of Quintet Private Bank and is a member of its Authorized Management Committee. Prior to joining Quintet, Mr. Leenaars served as Vice Chairman of the Global Wealth Management Division at UBS Group AG, a Swiss multinational investment bank and financial services company, from April 2015 to May 2021. In this role, he engaged on senior relationship management with a focus on UBS’ largest non-U.S. clientele.

 

Prior to joining UBS, Mr. Leenaars enjoyed a 24-year career at ING Group N.V., a Dutch multinational banking and financial services company, and various of its subsidiaries. From January 2010 until March 2015, he served as the CEO of ING Retail Banking Direct and International for ING, where he was responsible for Retail Banking and Private Banking worldwide. This included serving as CEO of ING Direct N.V., the parent company of ING Direct in the U.S., which pioneered the national direct deposit platform. Between 2004 and 2010, Mr. Leenaars was also member of ING’s Executive Board with responsibility for ING’s Global Retail and Private Banking operations and Group Technology and Operations. In addition, Mr. Leenaars previously served as a member of our Board from May 2012 to September 2012 in connection with Capital One’s acquisition of ING Direct.

 

Mr. Leenaars is a member of the Executive Committee of the Trilateral Commission (Paris, Tokyo, and Washington, DC).

 

Additional Public Directorships:

 

   None

 

 

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LOGO

 

 Director Since:  2019

 

 Age:  51

 

 Capital One Committees:          

 

   Compensation Committee
      (Chair)

 

   Governance and Nominating
      Committee

 

 Additional Capital One
 Company:

 

   Capital One, N.A.

 

  

François Locoh-Donou

 

President, Chief Executive Officer, and Director, F5 Networks, Inc.

 

Mr. Locoh-Donou has nearly two decades of enterprise technology experience, building a wide range of product teams, and operations around the world. He is well known for his ability to envision where industries are going and inspire organizations to identify and execute on future growth opportunities—especially in the areas of cloud, software, analytics, and security.

 

In April 2017, Mr. Locoh-Donou was hired as the President and Chief Executive Officer of F5 Networks, where he has refocused the company on Applications Services Software (including Security) for Multi-Cloud environments. He is also the only management member of the F5 Board of Directors. Prior to joining F5, Mr. Locoh-Donou held successive leadership positions at Ciena Corporation (from 2002 to March 2017), a network strategy and technology company, including Chief Operating Officer; Senior Vice President, Global Products Group; Vice President and General Manager, EMEA; Vice President International Sales; and Vice President and Marketing. Prior to joining Ciena, Mr. Locoh-Donou held research and development roles with Photonetics, a French opto-electronics company.

 

Mr. Locoh-Donou is also the co-founder and Chairman of Cajou Espoir, a cashew-processing facility that employs several hundred people in rural Togo, 80 percent of whom are women.

 

Additional Public Directorships:

 

   F5 Networks, Inc.

 

 

 

 

LOGO

 

 Director Since:  2012

 

 Age:  66

 

 Capital One Committees:          

 

   Governance and Nominating
      Committee

 

   Risk Committee (Chair)

 

 Additional Capital One
 Company:

 

   Capital One, N.A.

 

  

Peter E. Raskind

 

Former Chairman, President and Chief Executive Officer, National City Corporation

 

Mr. Raskind has more than 40 years of banking experience, including in corporate banking, retail banking, wealth management/trust, mortgage, operations, technology, strategy, product management, asset/liability management, risk management and acquisition integration. Through his extensive banking career, he has served in a number of senior executive leadership roles and held positions of successively greater responsibility in a broad range of consumer and commercial banking disciplines, including cash management services, corporate finance, international banking, wealth management and corporate trust, retail and small business banking, operations and strategic planning.

 

Most recently, Mr. Raskind was a consultant to banks and equity bank investors as the owner of JMB Consulting, LLC, which he established in February 2009 and managed through 2017. Prior to founding JMB Consulting, Mr. Raskind served as Chairman, President and Chief Executive Officer of National City Corporation, one of the largest banks in the United States, until its merger with PNC Financial Services Group in December 2008. Mr. Raskind has served as a director of United Community Banks, Inc. and Visa USA and Visa International. He also served on the board of directors of the Consumer Bankers Association, was a member of the Financial Services Roundtable, and on the executive committee of the National Automated Clearing House Association. In addition, Mr. Raskind served as Interim Chief Executive Officer of the Cleveland Metropolitan School District in 2011, and in 2010, he served as Interim Chief Executive Officer of the Cleveland-Cuyahoga County Port Authority.

 

Additional Public Directorships:

 

   None

 

 

 

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Section I—Election of Directors (Item 1 on Proxy Card)

 

 

LOGO

 

 Director Since:  2020

 

 Age:  68

 

 Capital One Committees:          

 

   Audit Committee

 

   Risk Committee

 

 Additional Capital One
 Company:

 

   Capital One, N.A.

 

  

Eileen Serra

 

Former Senior Advisor, JP Morgan Chase & Co.; Former Chief Executive Officer, Chase Card Services

 

Ms. Serra served in various leadership roles over the course of her more than 20 years in the financial services industry, which included responsibility for operations, product development, customer engagement, digital transformation, strategic and growth initiatives, and talent management. Prior to her financial services experience, Ms. Serra was a partner in a strategy consulting firm.

 

A seasoned credit card industry executive, Ms. Serra served in a variety of executive positions at JPMorgan Chase & Co., including as Chief Executive Officer of Chase Card Services from 2012 to 2016. While at JPMorgan Chase, Ms. Serra established and developed successful consumer credit card products and brands, loyalty programs, partner relationships, and digital mobile payment solutions. Most recently, from 2016 until her retirement in February 2018, she served as Senior Advisor focusing on strategic growth initiatives.

 

Prior to joining JPMorgan Chase in 2006, Ms. Serra was a Managing Director and Head of Private Client Banking Solutions at Merrill Lynch. She also served as Senior Vice President at American Express where, among other responsibilities, she led the Small Business Credit Card and Lending businesses. Prior to American Express, she was a partner at McKinsey & Company. Ms. Serra currently serves as a director and member of the compensation committee of Gartner, Inc. and director and member of the audit committee of Boxed, Inc.

 

Additional Public Directorships:

 

   Gartner, Inc.

 

   Boxed, Inc.

 

 

 

 

LOGO

 

 Director Since:  2003

 

 Age:  68

 

 Capital One Committees:          

 

   Compensation Committee

 

   Governance and Nominating
Committee

 

 Additional Capital One
 Company:

 

   Capital One, N.A.

 

  

Mayo A. Shattuck III

 

Former Chairman, Exelon Corporation; Former Chairman, President and Chief Executive Officer, Constellation Energy Group

 

Mr. Shattuck has decades of experience in global corporate finance and lending, corporate strategy, capital markets, risk management, executive compensation, and private banking, has led two large, publicly held companies and has served on other public company boards.

 

From 2013 to April 2022, Mr. Shattuck served as Chairman of the Board of Chicago-based Exelon Corporation, a Fortune 100 company that owns six utilities and is the nation’s largest competitive energy provider and commercial nuclear plant operator. Previously, Mr. Shattuck was Chairman, President and Chief Executive Officer of Constellation Energy Group, a position he held from 2001 to 2012. Mr. Shattuck is also Chairman of the Board of Johns Hopkins Medicine and Johns Hopkins Health System.

 

Mr. Shattuck has extensive experience in the financial services industry. He was previously at Deutsche Bank, where he served as Global Head of Investment Banking, Global Head of Private Banking and was Chairman of Deutsche Banc Alex. Brown. From 1997 to 1999, Mr. Shattuck served as Vice Chairman of Bankers Trust Corporation, which merged with Deutsche Bank in 1999. In addition, from 1991 to 1997, Mr. Shattuck was President and Chief Operating Officer and a director of Alex. Brown & Sons, a major investment bank, which merged with Bankers Trust in 1997. Mr. Shattuck is the former Chairman of the Institute of Nuclear Power Operators.

 

Additional Public Directorships:

 

   Gap, Inc.

 

 

 

 

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Section I—Election of Directors (Item 1 on Proxy Card)

 

 

LOGO

 

 Director Since:  2008

 

 Age:  71

 

 Capital One Committees:          

 

   Audit Committee (Chair)

 

   Risk Committee

 

 Additional Capital One
 Company:

 

   Capital One, N.A.

 

  

Bradford H. Warner

 

Former President of Premier and Small Business Banking, Bank of America Corporation

 

Mr. Warner has deep experience in a broad range of commercial, consumer, investment and international banking leadership roles, as well as in corporate banking functions, customer relationships, corporate culture change management, enterprise risk management, and technology.

 

Mr. Warner served in a variety of executive positions at BankBoston, FleetBoston, and Bank of America from 1975 until his retirement in 2004. These positions included President of Premier and Small Business Banking, Executive Vice President of Personal Financial Services, and Vice Chairman of Regional Bank.

 

Throughout his banking career, Mr. Warner served in leadership roles for many of the major business lines and functional disciplines that constitute commercial banking, including leadership of retail and branch banking, consumer lending (credit cards, mortgage and home equity), student lending and small business; various corporate banking functions, including community banking and capital markets businesses, such as underwriting, trading and sales of domestic and international fixed income securities, foreign exchange and derivatives; international banking businesses in Asia, northern Latin America and Mexico; and several investment-related businesses, including private banking, asset management and brokerage. He also served on the most senior management policy and governance committees at BankBoston, FleetBoston, and Bank of America.

 

Additional Public Directorships:

 

   None

 

 

 

 

LOGO

 

 Director Since:  2021

 

 Age:  53

 

 Capital One Committees:          

 

   Audit Committee

 

   Compensation Committee

 

 Additional Capital One
 Company:

 

   Capital One, N.A.

 

  

Craig Anthony Williams

 

President, Jordan Brand, Nike, Inc.

 

Mr. Williams, a seasoned marketing executive, has extensive experience in product development, leading cross-functional teams and driving global strategy and operations. He has served as the President of Jordan Brand at Nike, Inc. since January 2019, where he leads a cross-functional team focused on the brand’s vision, strategy and global growth.

 

Prior to joining Nike, Inc., Mr. Williams was the Senior Vice President, The Coca-Cola Co. and President of The Global McDonald’s Division (TMD) from January 2016 to January 2019, where he was responsible for brand and category growth. During his time at The Coca-Cola Co., Mr. Williams held a variety of executive roles within TMD Worldwide, including Senior Vice President and Chief Operating Officer, Vice President U.S., Assistant Vice President of U.S. Marketing and Group Director of U.S. Marketing. Prior to joining The Coca-Cola Co. in June 2005, Mr. Williams was a Global Marketing Director at CIBA Vision Corporation, a contact lenses and lens care product manufacturer, a brand management executive at Kraft Foods Inc., and served as a Naval Nuclear Power Officer in the U.S. Navy.

 

Additional Public Directorships:

 

   None

 

 

 

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Section I—Election of Directors (Item 1 on Proxy Card)

 

Director Nominee Highlights

 

LOGO

What We Look for in Individual Director Nominees

The evaluation and selection of director nominees is a key aspect of the Governance and Nominating Committee’s regular evaluation of the composition of, and criteria for membership on, the Board. When considering director nominees, including incumbent directors standing for re-election, nominees to fill vacancies on the Board, and nominees recommended by stockholders, the Governance and Nominating Committee focuses on the development of a Board composed of directors that meet the criteria set forth below.

 

Personal Characteristics    Commitment to the Company

   High personal and professional ethics, integrity and honesty, good character, and judgment

 

   Independence and absence of any actual or perceived conflicts of interest

 

   The ability to be an independent thinker and willingness to provide effective challenge to management

  

   A willingness to commit the time and energy to satisfy the requirements of Board and committee membership, including the ability to attend and participate in meetings of the Board and committees of which they are a member and the annual stockholder meeting and be available to management to provide advice and counsel

 

   A willingness to rigorously prepare prior to each meeting and actively participate in the meeting

 

   Possess, or be willing to develop, a broad knowledge of both critical issues affecting the Company and a director’s roles and responsibilities

 

   A willingness to comply with our Director Stock Ownership Requirements, Corporate Governance Guidelines, and Code of Conduct

Diversity    Skills and Experience

   Capital One considers diversity along a variety of dimensions, including the candidate’s professional and personal experience, background, perspective, and viewpoint, as well as the candidate’s gender, race, and ethnicity, as described in greater detail in our Corporate Governance Guidelines

 

   The Governance and Nominating Committee recognizes that Capital One serves diverse communities and customers, and has instructed the third-party search firm used in director recruiting efforts to seek highly qualified racially, ethnically, and gender-diverse individuals to include in its pool of nominees

  

   The value derived from each nominee’s skills, qualifications, experience, and ability to impact Capital One’s long-term strategic objectives

 

   Substantial tenure and breadth of experience in leadership capacities

 

   Business and financial acumen

 

   Understanding of the intricacies of a public company

 

   Experience in risk management

 

   Strong educational background

 

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Section I—Election of Directors (Item 1 on Proxy Card)

 

The Governance and Nominating Committee balances these considerations when assessing the composition of the Board, and has determined that all of our director nominees possess the personal characteristics, level of commitment to the Company, diversity, skills, and experience that align with the Company’s long-term strategy and that enable the Board to operate in an engaged and effective manner.

Other Considerations

For new candidates, the Governance and Nominating Committee also considers the results of the candidate’s interviews with directors and/or members of senior management and any background checks the Governance and Nominating Committee deems appropriate. In 2022, Capital One continued its engagement with Spencer Stuart, a third-party director search firm to identify and evaluate potential director candidates based on the criteria and principles described above.

When evaluating incumbent directors, the Governance and Nominating Committee also considers the director’s performance throughout the year, including the director’s attendance, preparation for, and participation in Board and committee meetings, the director’s annual evaluation, including feedback received from fellow Board members, and the director’s willingness to serve for an additional term, as further described in the section “Annual Assessment of Individual Director Nominees” on page 32.

 

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Section I—Election of Directors (Item 1 on Proxy Card)

 

Skills and Experience of Our Director Nominees

The Governance and Nominating Committee and the Board regularly review the Board’s membership in light of Capital One’s business model and strategic goals and objectives, the regulatory environment, and financial market conditions. In its review, the Governance and Nominating Committee considers whether the Board continues to possess the appropriate mix of skills and experience to oversee the Company in achieving these goals, and may seek additional directors as a result of this review. Our director nominees have the requisite experiences that, in the aggregate, meet an articulated set of director skills established by the Governance and Nominating Committee. These skills collectively allow our director nominees to effectively oversee the Company and create an engaged, effective, and strategically-oriented board.

 

 

LOGO

 

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Section I—Election of Directors (Item 1 on Proxy Card)

 

 
Strategic Planning and Transformation  

Experience setting a long-term corporate vision or direction, developing desirable products and customer segments, assessing geographies in which to operate, and evaluating competitive positioning

 
Banking and Financial Services  

Extended board experience or management experience in Retail Banking, Commercial Banking, Consumer Lending, Small Business Banking, Investment Banking, and/or other financial services

 
Consumer Lending, Retail Banking and/or Commercial Banking Executive  

Executive level experience and oversight of Consumer Lending, Retail Banking, and/or Commercial Banking

 
Digital and Technology  

Leadership and understanding of technology and digital platforms

 
Cybersecurity  

Experience with or oversight of cybersecurity (e.g., prior work experience, possession of a cybersecurity certification or degree or other knowledge, skills or background in cybersecurity)

 
Technology Executive  

Executive-level experience with direct oversight and expertise in technology, digital platforms, and cyber risk

 
Risk Management and Compliance  

Significant understanding with respect to the identification, assessment, and oversight of risk management programs and practices

 
Public Company Senior Executive Management  

Experience as a CEO or other senior executive at a public company

 
Public Accounting and Financial Reporting  

Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements

 
Talent Management, Compensation, and Succession Planning  

Understanding of the issues involved with executive compensation, succession planning, human capital management, and talent management and development

 
Public Company Governance  

Extended experience serving as a director on a large public company board and/or experience with public company governance issues and policies, including governance best practices

 
Regulated Industries and
Regulatory Issues
 

Experience with regulated businesses, regulatory requirements, and relationships with state and federal agencies

 
Marketing  

Experience with or oversight of marketing strategy and brand management

 

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Section II - Corporate Governance at Capital One

 

 

Overview of Corporate Governance at Capital One

Capital One is dedicated to strong and effective corporate governance that provides the appropriate framework for the Board to engage with and oversee the Company. Robust and dynamic corporate governance policies and practices are the foundation of an effective and well-functioning board, and are vital to preserving the trust of our stakeholders, including customers, stockholders, regulators, suppliers, associates, our communities, and the general public.

Information About Our Corporate Governance Policies and Guidelines

The Board has adopted Corporate Governance Guidelines to formalize its governance practices and provide its view of effective governance. Our Corporate Governance Guidelines embody many of our long-standing practices, policies, and procedures, which collectively form a corporate governance framework that promotes the long-term interests of our stockholders, promotes responsible decision-making and accountability, and fosters a culture that allows our Board and management to pursue Capital One’s strategic objectives.

To maintain and enhance independent oversight, our Board regularly reviews and refreshes its governance policies and practices as changes in corporate strategy, the regulatory environment and financial market conditions occur, and in response to stakeholder feedback and engagement.

The Board has also adopted Capital One’s Code of Conduct, which applies to Capital One’s directors, executives and associates, including Capital One’s CEO, CFO, Principal Accounting Officer, and other persons performing similar functions. The Code of Conduct reflects Capital One’s commitment to honesty, fair dealing, and integrity, and guides the ethical actions and working relationships of Capital One’s directors, executives, and associates in their interactions with investors, current and potential customers, fellow associates, competitors, governmental entities, the media, and other third parties with whom Capital One has contact.

For a description of the key governance practices of our Board, see “Key Board Governance Practices” beginning on page 27.

The following corporate governance documents are available at www.capitalone.com under “Investors,” then “Governance & Leadership,” then “Board of Directors and Committee Documents” or “Organizational and Governance Documents,” as applicable.

 

   

Amended and Restated Bylaws

 

   

Corporate Governance Guidelines

 

   

Board Committee Charters

   

Restated Certificate of Incorporation

 

   

Code of Conduct

 

 

Board Leadership Structure

The Independent Directors, each year in conjunction with the Board’s self-assessment, evaluate the continued effectiveness of the Board’s leadership structure in the context of Capital One’s specific circumstances, culture, strategic objectives, and challenges. The diverse backgrounds and experiences of our directors provide the Board with broad perspectives from which to determine the leadership structure best suited for Capital One and the long-term interests of Capital One’s stockholders and other stakeholders.

We believe that our existing Board leadership structure of combined Chairman/CEO and Lead Independent Director provides the most effective governance framework and allows our Company to benefit from

 

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Section II - Corporate Governance at Capital One

 

Mr. Fairbank’s talent, knowledge, and leadership as the founder of Capital One and allows him to use the in-depth focus and perspective gained in running the Company to effectively and efficiently lead our Board. As CEO, Mr. Fairbank oversees Capital One’s day-to-day operations and strategic planning, and as Chairman of the Board he leads the Board in its oversight role, including with respect to strategic matters and risk management.

The Company and the Board also benefit from an active and empowered Lead Independent Director who provides strong, independent leadership for the Board. The Board at least annually evaluates its leadership structure, including the effectiveness of the combined Chairman/CEO and Lead Independent Director leadership structure, and currently believes that the Chairman and CEO roles should be held by the same person.

Recognizing the importance of independent perspectives to the Board to balance the combined Chairman and CEO roles, Capital One appropriately maintains strong independent and effective oversight of our business and affairs through our Lead Independent Director; fully-independent Board committees with independent chairs that oversee the Company’s operations, risks, performance, and business strategy; experienced and committed directors; and frequent executive sessions. Our Independent Directors act as a strong counterbalance to our combined roles of Chairman of the Board and CEO.

Lead Independent Director

Our Board believes that an active and empowered Lead Independent Director is key to providing strong, independent leadership for the Board. The Lead Independent Director position, elected annually by the other Independent Directors upon the recommendation of the Governance and Nominating Committee, is a critical aspect of our corporate governance framework. Ms. Hackett, as Lead Independent Director, brings extensive experience leading companies that provide strategic organization and human resource consulting services to boards of directors and senior management teams. The Board believes that Ms. Hackett’s experience enables her to provide valuable and independent views to the boardroom, and ensure active communication between management and our Independent Directors to support their oversight responsibilities, including with respect to management of risks and opportunities presented by the markets in which Capital One competes.

 

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Section II - Corporate Governance at Capital One

 

The Lead Independent Director’s responsibilities include:

 

 

Board Leadership

 

   Organizing and presiding over executive sessions of the Board

 

   Setting the agendas for and leading executive sessions of the Board

 

   Having authority to call meetings of the Independent Directors

 

   Soliciting feedback for and engaging the CEO on executive sessions

 

   Advising the Chairman of the Board on the retention of advisors and consultants who report directly to the Board

 

   Advising the Governance and Nominating Committee and the Chairman of the Board on the membership of Board committees and the selection of committee chairs

 

   Acting as a key advisor to the CEO on a wide variety of Company matters

 

 

Board Culture

 

   Serving as liaison between the Chairman of the Board and the Independent Directors

 

   Facilitating discussion among the Independent Directors on key issues and concerns outside of Board meetings, including with respect to risk management

 

   Ensuring Board discussions demonstrate appropriate effective challenge of management, including with respect to risk management

 

   Facilitating teamwork and communication among the Independent Directors

 

   Fostering an environment that allows for engagement by and commitment of Board members

 

Board Meetings

 

   Approving meeting agendas for the Board, including addition or removal of items, as appropriate

 

   Approving information sent to the Board

 

   Approving Board meeting schedules and working with the Chairman of the Board and committee chairs to assure there is sufficient time for discussion of all agenda items

 

   Presiding at all meetings of the Board at which the Chairman of the Board is not present

 

Performance and Development

 

   Leading the annual performance assessment of the CEO

 

   Facilitating the Board’s engagement with the CEO with respect to the CEO’s performance assessment and CEO succession planning

 

   Leading the Board’s annual self-assessment and providing recommendations for improvement, if any

 

Stockholder Engagement

 

   Ensuring that they are available for consultation and direct communication with stockholders and stakeholders, upon request

 

   Reviewing stockholder communications addressed to the full Board, to the Lead Independent Director, or the Independent Directors, as appropriate

In evaluating candidates for Lead Independent Director, the Independent Directors consider several factors, including each candidate’s corporate governance experience, Board service and tenure, leadership roles, and ability to meet the necessary time commitment. For an incumbent Lead Independent Director, the Independent Directors also consider the results of the candidate’s annual Lead Independent Director assessment. For a description of the Lead Independent Director annual assessment process, see “Annual Assessment of the Lead Independent Director” beginning on page 32.

 

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Section II - Corporate Governance at Capital One

 

Key Board Governance Practices

2022 Board Meetings and Attendance

 

   

The Board held 15 meetings and the Board’s committees collectively held 32 meetings

 

   

In carrying out its responsibilities, the Audit Committee met a total of ten times, the Risk Committee met a total of eight times, the Governance and Nominating Committee met a total of seven times, and the Compensation Committee met a total of seven times

 

   

All directors then serving attended the 2022 Annual Stockholder Meeting, and Capital One expects all director nominees to attend the 2023 Annual Stockholder Meeting

 

   

Each of our current directors attended at least 75% of the aggregate number of the meetings of the Board and the committees on which they served during the period the director was on the Board or committee

Our Perspectives on Overall Board Composition and Refreshment

In recent years, investors have become increasingly focused on the composition of corporate boards and policies and practices that encourage board refreshment. At Capital One, we appreciate that our investors share our passion for cultivating a board that encompasses the optimal mix of diverse backgrounds, experiences, skills, expertise, qualifications, and an unwavering commitment to integrity and good judgment, all in order to thoughtfully oversee, advise, and guide management as they work to achieve our long-term strategic objectives.

The Governance and Nominating Committee, under the direction of its chair, who also serves as the Company’s Lead Independent Director, assesses the composition of, and criteria for, membership on the Board and its committees on an ongoing basis. In fulfilling this responsibility, the Governance and Nominating Committee has taken a long-term view and continuously assesses the resiliency of the Board over the next ten to fifteen years in alignment with the Company’s strategic direction to determine what actions may be desirable to best position the Board and the Company for success.

In assessing Board resiliency, the Governance and Nominating Committee considers a variety of factors, including board skills, industry experience, diversity, board size, tenure, evergreen recruiting, and staged refreshment. As a result of these long-term strategic resiliency assessments, the Governance and Nominating Committee has articulated a set of principles on board composition, including the following:

 

    Board Skills

 

   Consider the collective set of skills that allows the Board to act independently and provide an effective challenge to management, especially in the areas of business strategy, financial performance, enterprise risk management, cybersecurity risk, technology innovation, and executive talent and leadership

 

   Ensure collective Board skill sets evolve with corporate strategy

 

    Industry

 

    Experience

 

   Seek and retain Board members with industry experience, both banking and technology, that align with our long-term strategy

 

   Recognize that the financial services industry is complex and understand the importance of having directors who have witnessed the extended nature of the banking business and credit cycles and can share the wisdom of those experiences

    Diversity

 

   Believe having a Board with members who demonstrate a diversity of thought, perspectives, skills, backgrounds, and experiences, is important to building an effective and resilient board, and as a result, have a goal of identifying candidates that can contribute to that diversity in a variety of ways, including racially-, ethnically- and gender-diverse candidates

 

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Section II - Corporate Governance at Capital One

 

    Board Size

 

   Consider the appropriate size of the Board in relation to promoting active engagement and open discussion

 

   Continuously assess the depth of successors available to assume Board leadership positions for both expected and unexpected departures

    Tenure

 

   Believe that it is critical to have members across a continuum of director tenure in order to ensure the effective oversight of a large financial institution, which must simultaneously embrace innovation and changing market and customer expectations and prudently preserve the safety and soundness of the institution through long-term business and credit cycles

 

   Seek to have a mix of long-standing members, relatively new members, and remaining members at different points along the tenure continuum to cultivate Board membership that collectively represents members who have actively overseen the Company’s strategic journey through various business cycles, who have sufficient experience to assume Board leadership positions, and who bring fresh ideas and perspectives

    Evergreen     Recruiting

 

   Engage in a continuous process of identifying and assessing potential director candidates in light of the Board’s collective set of skills and future needs

 

   Recognize that recruiting new directors is not one-dimensional and that effective Board members are those as discussed under the “What We Look for in Individual Director Nominees” section, beginning on page 20

    Staged     Refreshment

 

   Take a long-term perspective to enable thoughtful director refreshment that meets strategic needs while avoiding disruption

 

   Take a planned approach to changes in board membership, considering the timing of new director onboarding relative to planned retirements and departures

 

   Recognize that new directors need time to become familiar with the Company’s business model and strategy and become deeply grounded in these matters to be well-positioned to challenge management effectively

 

   Acknowledge that relationships among Board members develop organically over time and recognize the importance of protecting and nurturing the open, values-based culture that the Board enjoys to appropriately oversee and challenge management

The Board leverages several long-standing practices and processes to support Board refreshment in keeping with the principles articulated above, including:

 

   

Annual evaluations of the Board and its committees (see “Annual Board and Committee Evaluations” beginning on page 30 for more information).

 

   

Annual assessments of individual directors (see “Annual Assessment of Individual Director Nominees” on page 32 for more information).

 

   

Annual assessments of the Lead Independent Director (see “Annual Assessment of the Lead Independent Director” beginning on page 32 for more information).

The Governance and Nominating Committee discusses director recruiting plans on a quarterly basis and provides regular updates to the Board on those plans. In support of the Board’s long-term resiliency and refreshment efforts, seven new independent directors have been appointed in the last five years, six of whom are current director nominees.

Process for Stockholder Recommendations of Director Candidates

Stockholders may propose nominees for consideration by the Governance and Nominating Committee by submitting the names and other relevant information as required by, and in compliance with, Capital One’s Bylaws, and further described in Capital One’s Corporate Governance Guidelines, to the Corporate Secretary at Capital One’s address set forth in the section “How to Contact Us” on page 56. Capital One’s Corporate Governance

 

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Guidelines require the Corporate Secretary to deliver a copy of the submitted information to the Chair of the Governance and Nominating Committee. The Governance and Nominating Committee will consider potential nominees proposed by stockholders on the same basis as it considers other potential nominees.

In addition, an eligible stockholder or group of stockholders may use Capital One’s “proxy access” bylaws to include stockholder-nominated director candidates in the Company’s proxy materials for the annual stockholder meeting. Our Bylaws permit up to 20 stockholders owning 3% or more of the Company’s outstanding common shares of voting stock continuously for at least three years to nominate and include in the Company’s proxy materials director nominees constituting up to two individuals or 20% of the Board (whichever is greater) provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in the Bylaws.

Director Independence

Except for our CEO, who is the Company’s founder, the Board has affirmatively determined that the other members of our Board are independent under Capital One’s Director Independence Standards (the “Independence Standards”), which have been adopted by the Board as part of Capital One’s Corporate Governance Guidelines. The Independence Standards reflect the director independence requirements set forth in the listing standards of the New York Stock Exchange (“NYSE”) and other applicable legal and regulatory rules, and also describe certain categorical relationships that the Board has determined to be immaterial for purposes of determining director independence.

The categorical relationships that the Board has deemed immaterial for purposes of determining director independence are: (i) relationships between Capital One and an entity where the director serves solely as a non-management director; (ii) transactions between Capital One and a director or a director’s immediate family member (or their primary business affiliations) that fall below the numerical thresholds in the NYSE listing standards (or do not otherwise preclude independence under those standards), and that are ordinary course, on arm’s-length market terms, and, in the case of extensions of credit, followed usual underwriting procedures, present no more than the normal collectability risk or other unfavorable features and are in compliance with applicable legal and regulatory requirements; and (iii) discretionary contributions made by Capital One to not-for-profit organizations, foundations, or universities in which a director (or immediate family member) serves as an executive officer that in any single fiscal year within the last three years do not exceed the greater of $1 million or 2% of that entity’s consolidated gross revenues.

In making its independence recommendations, the Governance and Nominating Committee and the Board evaluate information obtained from non-management directors’ responses to a questionnaire inquiring about their relationships with Capital One, and those of their immediate family members and primary business or charitable affiliations and other potential conflicts of interest, as well as certain information related to transactions, relationships, or arrangements between Capital One and a non-management director or their immediate family members, primary business, or charitable affiliations. Following this review, the Board determined that each of the director nominees (excluding our CEO) is independent under the Independence Standards. The Board also determined that Ms. Catherine West was independent during the period in 2022 when she served on the Board.

Capital One’s Corporate Governance Guidelines, including information relating to the Independence Standards, are available at www.capitalone.com under “Investors,” then “Governance & Leadership,” then “Organizational and Governance Documents.”

Director Onboarding and Education

The Company, in consultation with the Governance and Nominating Committee, has established director onboarding and continuing director education programs to support our directors in fulfilling their responsibilities and to assist them in keeping current on industry, corporate, regulatory, and other developments.

 

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All new directors participate in the Company’s director onboarding program to provide training relating to the Company’s values, strategic plans, accounting policies, financial reporting, risk management, code of ethics, key regulatory issues, competition, and industry dynamics. As part of this onboarding program, over a period of approximately 18 months, new directors meet with members of senior management serving in various roles and functions, as well as Board committee chairs, the Lead Independent Director, and individual directors, to review and discuss information about the Company, the business, the boardroom, and individual director roles and responsibilities. Additionally, new directors are assigned an experienced director to serve as a mentor to facilitate their onboarding to the Board and the Company.

As we continue to enhance our director onboarding experience, the Company developed and implemented the committee onboarding program, which is designed to facilitate and accelerate directors’ integration and contribution to the committees on which they serve.

Our continuing director education program is designed to provide: (i) regular updates on external opportunities for continuing education offered by applicable regulators, professional organizations, and academic institutions; (ii) internal director education programs; (iii) various board-related publications; and (iv) access to various peer-to-peer networks. Our directors are also encouraged to pursue other educational opportunities, at the Company’s expense, to enhance directors’ ability to perform their duties.

Executive Sessions

Our Independent Directors regularly convene executive sessions led by the Lead Independent Director at Board and committee meetings as needed. The executive sessions allow the Independent Directors to discuss strategy, CEO and senior management performance and compensation, succession planning, Board effectiveness, and other matters without management present.

In 2022, the Independent Directors of the Board met in executive session without members of management present and the Independent Directors of each committee also met in executive session without members of management present. During these executive sessions, Directors have access to all the members of senior management upon request, such as the CEO, CFO, General Counsel and Corporate Secretary, Chief Risk Officer, Chief Audit Officer, Chief Information Security Officer, Chief Technology Risk Officer, Chief Credit Review Officer, and Chief Compliance Officer. The Lead Independent Director and/or any director may request additional executive sessions of the Independent Directors.

Directors Are Actively Engaged Outside of Board Meetings

Engagement outside of Board meetings provides our directors with additional insight into our business and industry. It also provides our Board with valuable perspective on the performance of our Company, Board, CEO, and other members of senior management.

 

   

Our committee chairs and Lead Independent Director meet and communicate regularly with each other and with both the CEO and members of our management team, as well as with our federal regulators, usually independently of the CEO.

 

   

Our committee chairs and Lead Independent Director conduct pre-meeting reviews of agendas and meeting materials, and provide feedback directly to management. After Board meetings, the committee chairs and Lead Independent Director conduct post-meeting debriefs with management to discuss any follow-up items.

 

   

Individual directors confer with each other, our CEO, members of our senior management team, and other key associates, as needed.

Annual Board and Committee Evaluations

Annually, in compliance with the NYSE listed company rules and other applicable laws, rules, and regulations, the Board and its committees conduct formal self-evaluations to assess and improve the Board’s effectiveness and functionality. The Board believes that in addition to serving as a tool to evaluate and improve performance,

 

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evaluations can serve several other purposes, including the promotion of good governance and the integrity of financial reporting, reduction of risk, informing the Board refreshment process, strengthening the Board-management partnership, and helping set and oversee Board expectations of management. In assessing their performance, the Board and its committees take a multi-year perspective to identify and evaluate trends and assure themselves that areas identified for improvement are addressed appropriately and in a timely manner.

To ensure the process stays fresh and continues to generate rich insights, the Board follows a cyclical, programmatic approach when conducting Board and committee evaluations. This approach includes regular, holistic reviews of the evaluation framework, methodology, and form. While the Board and each of its committees conducts a formal evaluation annually, the Board considers its performance and that of its committees continuously throughout the year and shares feedback with management.

 

LOGO

Each year, the Board and its committees may conduct their annual evaluations through one or a combination of evaluative approaches, including written surveys, individual director interviews, group discussions in executive session, and/or engagement of a third-party facilitator.

As part of the Board’s self-evaluation process, directors consider various topics related to Board composition, effectiveness, structure, and performance and the overall mix of director skills, experience, and background. Specifically, topics considered during the 2022 annual Board and committee self-evaluations process included:

 

   

Board engagement, culture, and setting the “tone at the top”

 

   

Board leadership, including the roles of the Lead Independent Director and Chairman of the Board

 

   

Oversight of and engagement in corporate strategy (both short- and long-term strategic objectives) and Company performance

 

   

Oversight of the CEO, executive compensation, and evaluation

 

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CEO and executive talent development and succession planning

 

   

Access to Company executives and associates

 

   

Board and committee composition, including director skills, background, diversity, and new director recruiting activities

 

   

Oversight of enterprise and technology risk, including the stature of the risk management function and appropriateness of the Company’s risk appetites and risk management in light of the scale and complexity of the Company’s business

 

   

Overall Board governance including quality and quantity of materials and information, conduct of meetings, and support for those activities from management

Annual Assessment of Individual Director Nominees

Each year the Chair of the Governance and Nominating Committee conducts an individual director assessment process. This process includes candid, one-on-one discussions between the Governance and Nominating Committee’s Chair and each Board member regarding the individual performance and effectiveness of the directors nominated by the Board for re-election by Capital One’s stockholders. Directors may also provide feedback on any other individual director’s performance at any time, regardless of whether it is part of the formal assessment process.

 

LOGO

Annual Assessment of the Lead Independent Director

To support the Independent Directors in selecting the Lead Independent Director, the Governance and Nominating Committee oversees an annual process to evaluate the performance and effectiveness of the Lead Independent Director. Each year, the Governance and Nominating Committee designates one Independent Director as a facilitator, who solicits feedback and perspectives from all directors on the Lead Independent Director. The facilitator then shares the results with the Governance and Nominating Committee and, as appropriate, the Board, without the Lead Independent Director present. The Independent Directors consider the results of this assessment in the annual selection of the Lead Independent Director.

 

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The Lead Independent Director is currently Ms. Hackett. As Lead Independent Director, Ms. Hackett has a strong record of active engagement both inside and outside the boardroom, including regular meetings with federal regulators and company executives in one-on-one and group settings. Ms. Hackett is also an active member of Tapestry Networks’ Lead Director Network, a select group of lead independent directors from America’s most successful companies who share a commitment to improving corporate performance and earning stockholder trust through more effective board leadership. Leveraging her significant experience serving in leadership capacities in a variety of environments, Ms. Hackett has fostered a culture of collaboration, diligence, trust, and mutual respect that allows the Board to work effectively to provide oversight of and effective challenge to management. Based on her performance, the Independent Directors unanimously supported Ms. Hackett’s re-election as Lead Independent Director for a one-year term beginning May 2022.

Annual Performance Assessment of the CEO

Led by the Lead Independent Director, the Independent Directors annually assess the performance of Mr. Fairbank as Capital One’s CEO through a process developed and overseen by the Governance and Nominating Committee. This process includes an in-depth discussion of the CEO’s performance by the Independent Directors in executive session during which directors consider a variety of factors. The areas assessed relate to overall CEO performance, leadership, financial and operating performance, governance and risk management, strategic performance, and customer and associate satisfaction. The Independent Directors also consider feedback from the Board and self-assessment materials provided by Mr. Fairbank regarding his and the Company’s performance and achievements during the performance year. For additional information, see “Chief Executive Officer Compensation” beginning on page 91.

The annual CEO performance assessment is completed as part of Capital One’s year-end compensation process. The Compensation Committee manages year-end compensation decisions within the context of such assessment and recommends compensation for the CEO based on such assessment to the full Board. The Lead Independent Director and Chair of the Compensation Committee jointly share the feedback from the CEO performance assessment with Mr. Fairbank in a closed session.

The Board’s Role in Corporate Oversight

Capital One is dedicated to strong and effective corporate governance that provides the appropriate framework for the Board to engage with and oversee the Company. Our Board is accountable for oversight of Capital One’s business affairs and operations. In carrying out this responsibility, among other things, the Board oversees management’s development and implementation of the Company’s (i) corporate culture; (ii) corporate strategy; (iii) financial performance and associated risks; (iv) the enterprise-wide risk management framework, including cybersecurity risk; (v) succession planning for the Company’s CEO and other key executives; and (vi) policies, programs, and strategies related to ESG matters.

The Board regularly reviews and approves key governance policies and plans. Our Corporate Governance Guidelines formalize the Company’s governance practices and facilitate efficient and effective Board oversight. These Guidelines enable our Board to engage in responsible decision-making, work with management to pursue Capital One’s strategic objectives and promote the long-term interests of our stockholders. For information regarding the Board’s role in oversight of the Company’s policies, programs, and strategies related to environmental and social practices, see “Environmental, Social, and Governance Practices” beginning on page 48.

Corporate Culture

Capital One believes that a strong ethical corporate culture is a key element of sound and sustainable corporate governance practices, beginning at the top with senior leadership. The Board plays a critical role in supporting and overseeing Capital One’s corporate culture, mission, values, and setting the “tone at the top” by adopting policies, a code of ethics, a philosophy for hiring, and compensation practices that promote ethical behavior, compliance

 

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with laws and regulations, including those pertaining to consumer protection and privacy, effective internal controls and risk management, and sound governance. The Company’s governance and risk management programs also support a strong and sustainable culture in several ways, including through the governance framework, risk management program, ethics program, and talent management and compensation policies and practices.

The Board and its committees have many opportunities to oversee and engage with management on the Company’s culture throughout the year including through, among other things:

 

   

Reviewing and overseeing Capital One’s strategy, including engaging in constructive dialogue with the CEO and senior executives on the alignment of the Company’s culture, mission, and values with its long-term strategy during the annual Board strategy meeting (which is further discussed below under “Corporate Strategy”) and periodically throughout the year;

 

   

Reviewing and adopting employment policies, compensation plans and incentive structures that promote effective internal controls and governance practices and overall ethical behavior;

 

   

Engaging with the Chief Human Resources Officer and reviewing and discussing the results of associate engagement surveys (which include associate feedback on the Company’s culture, mission, and values), associate retention and turnover metrics, employment policies and benefits, and the Company’s diversity and inclusion efforts and results; and

 

   

Approving and overseeing adherence to the Company’s Code of Conduct, and receiving regular reporting from the Chief Compliance Officer on the Company’s ethics program and associate conduct.

Corporate Strategy

The Board, in fulfilling its responsibility to oversee Capital One’s business affairs and operations, manage risk and maximize long-term stockholder value, is accountable for reviewing and overseeing the creation and implementation of Capital One’s strategy. Management is responsible for developing, communicating, and implementing a strategy that allows Capital One to: (i) invest in long-term capabilities and opportunities; (ii) secure competitive, endgame positions in our key businesses; (iii) attract and retain customers; (iv) grow resiliently; (v) promote ethical behavior and compliance with applicable laws and regulations; (vi) withstand economic stress and market volatility; and (vii) adhere to the Board’s established risk appetite. These strategies allow us to deliver long-term benefits and returns to our stockholders while helping associates grow, customers succeed, and communities thrive.

The development and assessment of Capital One’s strategy is an ongoing, iterative process that involves the Board, the CEO, Division Presidents, the CFO, the General Counsel and Corporate Secretary, the Chief Risk Officer, the Chief Audit Officer, all other Executive Committee Members, numerous lines of business and enterprise leaders and the Corporate Strategy team. Each year, the Board participates in an annual Board strategy meeting at which the Board reviews and discusses the Company’s long-term strategy with the CEO and key senior leaders. The Board provides effective challenge, feedback, and input on the Company’s strategy, strategic priorities, and investments. Following the Board strategy meeting, the Chief Risk Officer meets with the Board to provide a risk assessment of Capital One’s strategic initiatives. After review, the Board approves the Company’s strategic plan. Furthermore, the Risk Department regularly provides the Risk Committee, among other things, with a report of the Company’s performance against its risk appetite metrics, assessments of the external environment and the Company’s positioning in context of key risk categories

The Board regularly reviews the financial, competitive, and risk performance of the Company and updates on key strategic objectives. Each line of business reports to the Board the progress on their strategic and financial initiatives at least annually. Capital One uses various tools to assess performance against strategic initiatives including: financial performance, competitive positioning and market share, technology capabilities, performance against risk appetites and limits, customer satisfaction and advocacy scores, qualitative progress reports, talent

 

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management, system availability and downtime statistics, risk ratings and measurements, and market-based indicators. Utilizing these performance measurement tools, the Board is able to carefully monitor the progress and assess the effectiveness of our strategic plan and engages in informed discussions with management regarding financial performance and trajectory, capital allocation, strategy implementation, and risk-mitigation plans, as appropriate.

Financial Performance and Associated Risks

The Board oversees the Company’s financial performance by reviewing with management, on a regular basis, the Company’s quarterly and annual financial statements. The Audit Committee oversees the integrity of the Company’s financial statements by, among other things, obtaining independent assurance as to the completeness and accuracy of its financial statements from an independent registered public accounting firm, whose qualifications, independence, and performance, it reviews on an annual basis. The Audit Committee also oversees the integrity of the Company’s internal controls over financial reporting by, among other things, reviewing periodic assessments of the adequacy and effectiveness of the Company’s financial controls performed by both the Company’s independent registered public accounting firm and internal audit function. In addition, the Board, either directly or through the Risk Committee, plays an integral role in the oversight of capital planning and adequacy, funding and liquidity risk management, market risk management, investment portfolio management, and other asset liability management matters.

Risk Oversight

Effective risk management and control processes are critical to our safety and soundness, our ability to predict and manage the challenges that Capital One and the financial services industry face and, ultimately, our long-term corporate success. The enterprise-wide risk management framework defines the Board’s appetite for risk taking and enables senior management to understand, manage and report on risk. The risk management framework is implemented enterprise-wide and includes seven risk categories: compliance, credit, liquidity, market, operational, reputation and strategic.

The Board’s role in risk oversight of Capital One is consistent with its leadership structure, with the CEO and other members of senior management having responsibility for assessing and managing Capital One’s risk exposure on a day-to-day basis, and the Board and its committees providing oversight in connection with these efforts. The Board’s oversight focuses on our material risks and any notable emerging themes to ensure that Capital One’s risk management is adequate. The Chair of the Risk Committee, in collaboration with the Lead Independent Director, helps ensure that the Board has appropriate discussions on risk topics. The Risk Committee is responsible for reviewing and recommending to the Board for approval certain risk appetites taking into account the Company’s structure, risk profile, complexity, activities, size, and other appropriate risk-related factors. The Risk Committee considers both current risk, including timeframes reflected by those risks, as well as emerging risks and future threats.

At the management level, senior management committees serve as governance forums for the CEO, Chief Risk Officer, and other management executives to receive and discuss risk management information, reports, views, and escalated matters from lines of business, the Risk Department, the Audit Department and other areas of the Company. Enterprise-wide risk management is generally the responsibility of the Chief Risk Officer, who has accountability for proposing risk appetite and reporting levels related to all seven risk categories. The Chief Risk Officer is also responsible for ensuring that the Company has an overall enterprise risk framework and that it routinely assesses and reports on enterprise level risks. The Chief Risk Officer reports both to the CEO and to the Risk Committee, and updates the Risk Committee regularly on the Company’s performance on risk appetite metrics in addition to ad hoc reports on emerging risks.

The Board meets with outside advisors periodically, as appropriate and necessary, and is empowered to consult at any time with outside advisors related to future threats and trends. The Audit Committee also plays an important risk oversight function, and oversees elements of compliance, including financial reporting that encompasses disclosure controls and procedures. The Compensation Committee oversees compensation policies and practices

 

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to ensure balanced risk-taking in our compensation programs, practices and decisions as further described in “Risk Assessment of Compensation Policies and Practices” on page 37 below. Finally, the Board as a whole oversees the entire enterprise-wide risk framework for the Company, including the oversight of strategic risk.

Cybersecurity and Technology Risk

As a financial services company entrusted with the safeguarding of sensitive information, our Board believes that a strong enterprise cyber program is vital to effective risk management. As part of its program of regular oversight, the Risk Committee of the Board is responsible for overseeing cyber risk, information security, and technology risk, including management’s actions to identify, assess, mitigate, and remediate material cyber issues and risks. The Risk Committee receives at least quarterly reports from the Chief Information Security Officer and Chief Technology Risk Officer on the Company’s technology and cyber risk profile, enterprise cyber program, and key enterprise cyber initiatives. In addition, the Risk Committee discusses matters escalated to it by the Technology and Cyber Risk Committee, a management-level committee dedicated to the discussion of enterprise-wide cybersecurity and technology risk issues whose responsibilities include, among other things, discussion of cyber and technology risks. The Risk Committee coordinates with the full Board regarding the strategic implications of cyber and technology risks.

The Chief Information Officer, Chief Information Security Officer, and Chief Technology Risk Officer also follow a risk-based escalation process to notify the Risk Committee outside of the quarterly reporting cycle when they identify an emerging risk or material issue. The Risk Committee annually reviews and recommends the Company’s information security policy and information security program to the Board for approval. At least annually, the Board reviews and discusses the Company’s technology strategy with the Chief Information Officer; reviews and discusses the Company’s cybersecurity strategy with the Chief Information Security Officer and Chief Technology Risk Officer; and approves the Company’s technology strategic plan. In addition, the Risk Committee participates in periodic cyber education sessions.

Succession Planning

Pursuant to our Corporate Governance Guidelines, the Board is responsible for maintaining a succession plan for the CEO and certain key executive roles. A planning process has been developed and maintained to identify, develop, and assess successors to the CEO and certain key executives. The Board reviews and updates these succession plans at least annually. Our Board believes that the directors and the CEO should work together on executive succession planning and that the entire Board should be involved. Each year, as part of Capital One’s succession planning process, our CEO provides the Board with recommendations on, and evaluations of, potential CEO successors. The Board considers a number of factors such as experience, skills, competencies, diversity, and potential in its review of the senior executive team to assess which executives possess or can develop the attributes that the Board believes are necessary to lead and achieve the Company’s goals. Among other steps taken to promote this process throughout the year, executives one and two levels below the CEO often attend Board meetings and present to the Board, providing the Board with numerous opportunities to interact with our senior management and assess their leadership capabilities. Additionally, each line of business and the Risk, Audit, and Finance functions engage in succession planning for key roles at least once per year. The Chief Human Resources Officer reviews these line of business succession plans.

Our Board proactively reviewed plans for temporary emergency successors across key roles in late 2022. The temporary emergency succession plan is intended to identify the leaders who can assume the responsibilities in the immediate short-term to ensure business continuity, day-to-day management of the team and business for our senior management and key roles. Our Board also has established steps to address emergency CEO succession planning for an unplanned CEO succession event. Our emergency CEO succession planning is intended to enable our Company to respond to an unexpected CEO transition by continuing our Company’s safe and sound operation and minimizing potential disruption or loss of continuity to our Company’s operations and strategy. The Board reviews annually the CEO’s emergency successor recommendations. As a result of this evergreen process, there is a named CEO emergency successor should the CEO become unexpectedly unable to serve.

 

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Risk Assessment of Compensation Policies and Practices

The Compensation Committee oversees all of our compensation policies and practices, including our incentive compensation policies and practices, with a view toward ensuring that such policies and practices encourage balanced risk-taking, are compatible with effective controls and risk management, align with our business strategy, and enable the Company to attract and retain top talent, especially in key job functions. Every two years, the Compensation Committee reviews and approves the Incentive Compensation Governance Policy, which applies to all Company associates and governs incentive compensation decisions. The Incentive Compensation Governance Policy provides the framework for oversight of the design of incentive compensation programs. In setting executive compensation, the Compensation Committee assesses each of the NEOs against one or more performance objectives specifically designed to evaluate the degree to which the NEOs balanced risks inherent in their specific roles. The Compensation Committee also implements additional risk-balancing features for certain equity awards, as described in more detail in the “Compensation Discussion and Analysis” beginning on page 78.

In addition, the Compensation Committee reviews the Company’s NEO and other senior executive compensation programs as well as any other material incentive compensation programs, plans or agreements. During these reviews, the Compensation Committee discusses the Company’s most significant risks, including the Company’s status with respect to managing those risks and the relationship of those risks to compensation programs. The review includes discussion and analysis of risk-balancing features embedded in these incentive compensation programs and other actions taken by the Company to appropriately balance risk and achieve conformance with regulatory guidance. The Compensation Committee also discusses these programs with the Company’s Chief Risk Officer, Chief Human Resources Officer, and the Compensation Committee’s independent compensation consultant, as appropriate. Based on these discussions, the Compensation Committee believes our compensation programs are consistent with safety and soundness, operate in a manner that appropriately balances risk, and are not reasonably likely to have a material adverse effect on the Company.

The Compensation Committee’s active oversight, together with the Company’s interactions and discussions with its regulators, has further enhanced the Company’s risk management and control processes with respect to incentive compensation at the Company and supported our continued compliance with the interagency guidance on sound incentive compensation practices.

Stockholder Engagement

We value the input and insights of our stockholders and are committed to continued meaningful engagement with investors. As a result, we engage in continuous outreach throughout the year to discuss with our stockholders the issues that are important to them, listen to their expectations for us, and share our views. During our discussions, we also seek to provide visibility and transparency into our business, our performance, and our governance and compensation practices. We report stockholder feedback to our Board to help them respond to stockholders’ concerns and feedback.

Stockholder Engagement Program

In 2022, we engaged in direct outreach and discussions with stockholders representing approximately 72% of our outstanding shares. Key topics of focus included Company strategy, financial performance, business trends, ESG matters, executive compensation, and board composition. Key features of our stockholder engagement program include: (i) continuous, year-round outreach; (ii) meaningful board-driven engagement; (iii) regular board reporting; and (iv) stockholder-driven improvements.

 

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LOGO

Continuous Outreach

Our CEO, CFO, and Investor Relations team meet frequently with stockholders and the investment community regarding Company strategy and performance. In addition, members of management, including our Investor Relations, Governance and Securities, and Executive Compensation teams, as well as our General Counsel and Corporate Secretary and our CFO, meet with key governance contacts at our larger stockholders.

Meaningful Engagement

Our goal is to engage with our stockholders in a manner characterized by both transparency and respect, fostering collaborative and mutually beneficial discussions. Depending on the topics discussed with investors, our engagement with stockholders may include the Lead Independent Director, the Chair of the Compensation Committee, or the Chair of the Governance and Nominating Committee (if different from the Lead Independent Director).

Regular Board Reporting

The Governance and Nominating Committee, the Compensation Committee, and the Board request and receive reports several times a year from our Investor Relations team and members of management and actively discuss stockholders’ feedback and insights. Our Board and management review and evaluate stockholder input to identify issues and concerns that may require Board action or enhancements to our policies, practices, or disclosure.

Board’s Response to Stockholder Feedback

In response to stockholder feedback, we have made the following improvements to our corporate governance and executive compensation practices and disclosures:

 

   

Enhanced disclosure to include a detailed director skills matrix, showing each individual nominee’s self-identified skills and attributes that are most relevant to fulfill the Board’s oversight responsibilities in light of the Company’s business, strategy and risk management. See “Skills and Experience of Our Director Nominees” beginning on page 22 for additional information.

 

   

Published an inaugural ESG Report to provide an integrated, comprehensive overview of the Company’s ESG focus areas and initiatives in response to discussions held with investors during the Company’s formal stockholder outreach and as a result of management’s and the Board’s continuous benchmarking against emerging governance practices. We also expanded disclosure in our proxy statement regarding our approach to ESG matters in response to discussions held with investors during the Company’s formal stockholder outreach and as a result of management’s and the Board’s continuous benchmarking against emerging governance practices. See “Environmental, Social, and Governance Practices” beginning on page 48 for more information.

 

   

The Company amended its Restated Certificate of Incorporation to permit stockholders to act by written consent, subject to certain procedural and other safeguards that the Board believes are in the best interests of Capital One and our stockholders.

 

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The Compensation Committee and the Independent Directors determined to award a portion of the CEO’s year-end incentive in the form of a performance share award that vests entirely based on the Company’s relative TSR over a three-year performance period relative to the Performance Share Peers.

 

   

Added disclosure regarding the settlement value related to the performance share awards that vested during the performance year based on the Company’s performance for the associated three-year performance period in the Compensation Discussion and Analysis. See “Settlement of Performance Shares Granted in January 2020” on page 104 for additional information.

 

   

Enhanced our description of the Compensation Committee and the Directors’ processes for considering Company performance throughout the year and determining the level and pay mix associated with the year-end incentive awards granted to our NEOs. See “Compensation Committee Process to Determine Year-End Incentive” on page 97 and “Our Compensation Governance Cycle” on page 90.

 

   

The Compensation Committee and the Independent Directors increased the size and diversity of the Company’s peer group used to determine the level and components of NEO compensation to add seven additional peers, including diversified financial institutions and payment companies, with whom we compete for executive talent. See “Peer Groups” beginning on page 115 for more information.

Stockholder Engagement Cycle

While our Investor Relations team and management meet continuously throughout the year, the following chart describes the typical annual cycle of our formal stockholder engagement.

 

 

LOGO

 

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We Engage Across Many Channels

 

 
Company-Led Engagement   Stockholder-Led Engagement

   Dedicated Investor Relations Department. Our Investor Relations professionals are dedicated full-time to responding to questions from stockholders about the Company, its strategy, performance, governance, and other issues of investor interest.

 

   Formal Outreach Program. In addition to continuous outreach on a broad set of topics, our formal outreach program includes proactive outreach to our largest stockholders at least twice a year focused on governance, ESG, compensation, and related matters. Through our formal outreach program, our Board and management gain stockholder insights and an opportunity to assess and respond to stockholder sentiment.

 

   Quarterly Earnings Conference Calls. In addition to prepared remarks, our management team participates in a question-and-answer session aimed at allowing stockholders to gain further insight into the Company’s financial condition and results of operations.

 

   Regular Investor Conferences and Road Shows. Management and our Investor Relations team routinely engage with investors at conferences and other forums. During 2022, the Company attended 11 investor conferences and hosted over 190 investor engagements.

 

   Meetings with Directors. If requested, our directors are available for consultation and direct communication with our stockholders.

 

   Voting. Our stockholders have the opportunity to vote for the election of all of our directors on an annual basis using a majority voting standard, and, through our annual vote on executive compensation, to regularly express their opinion on our compensation programs.

 

   Annual Stockholder Meeting. Our directors are expected to, and do, attend the annual stockholder meeting, where all of our stockholders are invited to attend, ask questions, and express their views.

 

   Written Correspondence. Stockholders may write to the Board through the Corporate Secretary at the address provided below in “How to Contact Us” on page 56.

 

   Special Meetings. A stockholder or group of stockholders that hold at least 25% of our outstanding common stock may request a special stockholder meeting.

 

   Proxy Access. A stockholder or group of up to 20 stockholders who have owned at least 3% of the Company’s outstanding common shares of voting stock continuously for at least three years may nominate and include in the Company’s proxy statement the greater of two director candidates or 20% of the total Board.

 

   Written Consent. The Company’s Restated Certificate of Incorporation permits stockholders to act by written consent, subject to certain procedural and other safeguards.

 

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Board Committees

Our Board has four standing committees: Audit, Compensation, Governance and Nominating, and Risk. Each of our committees:

 

   

Is led by an active, empowered, and independent committee chair

 

   

Is comprised of all independent members

 

   

Operates in accordance with a written charter, which is reviewed annually

 

   

Assesses its performance annually

 

   

Has authority to retain outside advisors, as desired

Information About Our Current Board Committee Membership and 2022 Committee Meetings

 

       
  Director    Audit(1)    Compensation   

Governance

and Nominating

   Risk
       

Richard D. Fairbank

                   
       

Ime Archibong

       

 

LOGO

 

         
       

Christine Detrick

  

 

LOGO

 

            

 

LOGO

 

       

Ann Fritz Hackett

       

 

LOGO

 

  

 

LOGO

 

  

 

LOGO

 

       

Peter Thomas Killalea

       

 

LOGO

 

       

 

LOGO

 

       

Eli Leenaars(2)

  

 

LOGO

 

  

 

LOGO

 

       

 

LOGO

 

       

François Locoh-Donou

       

 

LOGO

 

  

 

LOGO

 

    
       

Peter E. Raskind

            

 

LOGO

 

  

 

LOGO

 

       

Eileen Serra(2)

  

 

LOGO

 

            

 

LOGO

 

       

Mayo A. Shattuck III

       

 

LOGO

 

  

 

LOGO

 

    
       

Bradford H. Warner(2)

  

 

LOGO

 

            

 

LOGO

 

       

Craig Anthony Williams

  

 

LOGO

 

  

 

LOGO

 

         

Number of Meetings

   10    7    7    8
           

LOGO Chair     LOGO Member

 

 

(1)

The Board has determined that each member of the Audit Committee is “financially literate” pursuant to the listing standards of the NYSE. No member of the Audit Committee simultaneously serves on the audit committees of more than three public companies, including Capital One.

 

(2)

The Board has determined that Mr. Leenaars, Ms. Serra, and Mr. Warner are “audit committee financial experts” under the applicable Securities and Exchange Commission (“SEC”) rules based on their experience and qualifications.

 

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Section II - Corporate Governance at Capital One

 

Committee Membership Determinations

Annually, the Governance and Nominating Committee assesses and considers membership for each of the Board’s standing committees. This review takes into account, among other factors, committee needs, director experience, committee succession planning, and the desire to balance membership continuity with new insights.

The Chair of the Governance and Nominating Committee facilitates discussions with management, committee chairs, the Chairman of the Board, and individual directors, as needed, and shares that feedback with the Governance and Nominating Committee. The Governance and Nominating Committee makes recommendations for committee membership and chairs to the full Board.

Committee Responsibilities

 

 
Audit Committee   Compensation Committee

Primary Responsibilities:

 

   Assist our Board with the oversight of the appointment, compensation, qualifications, independence, performance, and retention of the Company’s independent registered public accounting firm

 

   Assist our Board with the oversight of the integrity of the Company’s financial statements, including matters related to internal controls over financial reporting

 

   Review and discuss with management their assessment of the effectiveness of the Company’s disclosure controls and procedures

 

   Review and discuss with management (i) the key guidelines and policies governing the Company’s significant processes for risk assessment and risk management; and (ii) the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures

 

   Annually review the performance, independence, and compensation of the Chief Audit Officer and oversee the internal audit function

 

   Oversee compliance by the Company with legal and regulatory requirements

 

   Perform the fiduciary audit function as the audit committee of our bank subsidiary in accordance with federal banking regulations

 

   Review SEC and other public disclosures relating to ESG matters

 

   Review and recommend to the Board approval of the Company’s Code of Conduct, including any waivers of the Code of Conduct for directors and certain executive officers

 

Primary Responsibilities:

 

   Evaluate, approve, and recommend to the Independent Directors the CEO’s compensation, including any salary, incentive awards, perquisites, and termination arrangements

 

   Review, approve, and recommend the salary levels, incentive awards, perquisites, and termination arrangements for senior management, other than the CEO, to the Independent Directors

 

   Review and approve the Company’s goals and objectives, including any appropriate ESG elements relevant to compensation, and oversee the Company’s policies and programs relating to compensation and benefits available to senior management

 

   Oversee incentive compensation programs for senior management and others who can expose the Company to material risk with a goal that such programs be designed and operated in a manner that achieves balance and is consistent with safety and soundness

 

   Administer Capital One’s 2004 Stock Incentive Plan, 2002 Associate Stock Purchase Plan, and other compensation and benefits plans

 

   Periodically review and recommend director compensation to the Board

 

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Governance and Nominating Committee   Risk Committee

Primary Responsibilities:

 

   Plan for director succession and assist our Board by identifying and recommending nominees for election to our Board and review the qualifications of potential Board members

 

   Review and recommend committee membership

 

   Lead the Company’s corporate governance policies and practices, including recommending to the Board the Corporate Governance Guidelines

 

   Oversee the Board and CEO’s annual evaluation process and periodically discuss the plan for the succession of the CEO and certain other key executives

 

   Oversee management’s stockholder engagement program and practices and evaluate stockholder proposals and other correspondence

 

   Establish and oversee processes for annual individual director and Board assessments and oversee that committee chairs perform annual committee evaluations

 

   Keep informed regarding external governance trends, including reviewing benchmarking research conducted by management

 

   Oversee the Company’s policies, programs, and strategies related to ESG matters or coordinate such oversight with other Board committees and/or the full Board, as appropriate

 

Primary Responsibilities:

 

   Assist our Board with oversight of the Company’s enterprise-wide risk management framework, including policies and practices established by management to identify, assess, measure, and manage key risks facing the Company across all of the Company’s risk categories: strategic, compliance, operational, reputational, credit, market, and liquidity risk, and emerging risks, such as risks related to ESG matters

 

   Discuss with management the enterprise’s risk appetite and tolerance, and at least annually recommend to the full Board the statement of risk appetite and tolerance to be communicated throughout the Company

 

   Review and approve annually the credit review plans and policies, and any significant changes to such plans

 

   Review and recommend to the Board the Company’s liquidity risk tolerance at least annually, taking into account the Company’s capital structure, risk profile, complexity, activities, and size. Senior management reports to the Risk Committee or the Board regarding the Company’s liquidity risk profile and liquidity risk tolerance at least quarterly

 

   Oversee the Company’s technology and cyber risk profile, top technology and cyber risks, enterprise cyber program and key enterprise cyber initiatives

 

   Review and recommend to the Board the Company’s resolution and recovery plans

The Charters of the Audit, Compensation, Governance and Nominating, and Risk Committees are available on our website at www.capitalone.com, under “Investors,” then “Governance & Leadership,” then “Board of Directors and Committee Documents.”

Compensation Committee Consultant

The Compensation Committee has the authority to retain and terminate legal counsel and other consultants and to approve such consultants’ fees and other retention terms. The Compensation Committee has retained the services of Frederic W. Cook & Co., Inc. (“FW Cook”), an independent executive compensation consulting firm. FW Cook reports to the Compensation Committee and its engagement may be terminated by the Compensation Committee at any time.

The Compensation Committee determines the scope and nature of FW Cook’s assignments. In 2022, FW Cook performed the following work for the Compensation Committee:

 

   

Provided independent competitive market data and advice related to the compensation for the CEO and the other executive officers, including the evolution of the Company’s peer comparator group used for competitive analyses

 

   

Reviewed management-provided market data and recommendations on the design of compensation programs for senior executives other than the CEO

 

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Reviewed Capital One’s executive compensation levels, performance, and the design of incentive programs

 

   

Reviewed the Company’s non-management director compensation program and provided competitive compensation data and director compensation program recommendations for review and consideration

 

   

Provided information on executive and director compensation trends and analyses of the implications of such trends for Capital One

Consultants from FW Cook typically attend Compensation Committee meetings and executive sessions of the Compensation Committee upon request of the Chair of the Compensation Committee, including meetings held jointly with the Independent Directors to review or approve the compensation for the CEO and the other executive officers and to provide an independent perspective regarding such compensation practices.

FW Cook does not provide any additional services to the Company or its management other than the services provided to the Compensation Committee. The Compensation Committee has considered factors relevant to FW Cook’s independence from management under SEC and NYSE rules and has determined that FW Cook is independent from management.

Executive Officers

The following individuals serve as the Company’s executive officers:

 

   

 Robert M. Alexander        

 

 Chief Information Officer

 

 Age: 58

 

Mr. Alexander has served as our Chief Information Officer since May 2007, and is responsible for overseeing all technology activities for Capital One. Mr. Alexander joined Capital One in April 1998. From April 1998 to May 2007, Mr. Alexander had responsibility at various times for a number of Capital One’s lending businesses, including the U.S. consumer credit card and installment loan businesses.

   

 Neal A. Blinde                   

 

 President, Commercial Banking

 

 Age: 50

 

Mr. Blinde has served as our President, Commercial Banking since March 2022, and is responsible for leading all aspects of Commercial Banking including Corporate Banking, Commercial Real Estate Banking, Capital Markets, Treasury Services and all related operations. Prior to joining Capital One, Mr. Blinde served in various leadership roles at Wells Fargo & Company, a financial services company, most recently serving as Executive Vice President and Treasurer from October 2015 to December 2021.

   

 Kevin S. Borgmann          

 

 Senior Advisor to the CEO

 

 Age: 51

 

Mr. Borgmann has served as a Senior Advisor to the CEO and executive team since February 2018, with a focus on strategy, risk management, and executive recruiting matters. Mr. Borgmann joined Capital One in August 2001. Since that time he has served in a variety of roles at Capital One, including Senior Vice President with the Credit Card business from March 2008 until September 2010, President of Capital One Auto Finance from September 2010 until October 2012, Deputy Chief Risk Officer from October 2012 to January 2013, and Chief Risk Officer from January 2013 through January 2018.

   

 Matthew W. Cooper        

 

 General Counsel and Corporate

 Secretary

 

 Age: 51

 

Mr. Cooper has served as our General Counsel, Corporate Secretary and Head of Environmental, Social and Governance since March 2022, and is responsible for overseeing Capital One’s Legal Department, Board of Directors and Senior Executive governance processes and ESG coordination. Mr. Cooper joined Capital One in January 2009. From January 2009 to March 2022, Mr. Cooper held a variety of roles within Capital One’s Legal Department, including Chief Counsel, Litigation from January 2009 to February 2014, Chief Counsel, Global Card from July 2012 to January 2017, Chief Counsel, Legal from January 2016 to February 2018 and General Counsel from February 2018 to March 2022.

   

 

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 Lia N. Dean                      

 

 President, Banking and  Premium Products

 

 Age: 45

 

Ms. Dean has served as our President, Banking & Premium Products since July 2022. Ms. Dean is responsible for leading Capital One’s Retail Bank strategy, customer experience and end-to-end operations. Ms. Dean also oversees Capital One’s premium cards, and its shopping and travel businesses. Ms. Dean joined Capital One in April 2014. From April 2014 to June 2018, Ms. Dean served as Senior Vice President, Strategy for Capital One’s Retail and Direct Bank businesses, where she led the national expansion of Capital One Cafés. From June 2018 to June 2020, Ms. Dean served as our Head of Bank Marketing and Retail, from June 2020 to November 2020, Ms. Dean served as Head of Upmarket, Card Customer Experience & Bank Marketing and from November 2020 until July 2022 Ms. Dean served as President, Retail Bank & Premium Card Products.

 

 Kaitlin Haggerty             

 

 Chief Human Resources Officer

 

 Age: 38

 

Ms. Haggerty has served as our Chief Human Resources Officer since February 2022, and is responsible for overseeing Capital One’s Human Resources strategy, recruitment efforts, and development programs. Ms. Haggerty joined Capital One in October 2017 as a Senior Director in Corporate Strategy. From October 2017 to June 2020, Ms. Haggerty served in roles of increasing responsibility in our Corporate Strategy Group, where she partnered with the Card leadership team on product and growth strategies. In June 2020, she transitioned from her role as Managing Vice President in Corporate Strategy to become the head of the Walmart Partnership. From July 2020 to November 2021, Ms. Haggerty led the Walmart Partnership program within our Card business before transitioning to the HR organization as a Senior Vice President.

 

 Sheldon “Trip” Hall        

 

 Chief Risk Officer

 

 Age: 46

 

Mr. Hall has served as our Chief Risk Officer since August 2018, and is responsible for all aspects of Capital One’s risk management function, including oversight of risk management activities in areas such as credit risk, operational risk, compliance risk, and technology risk. Mr. Hall joined Capital One in June 1997. Since that time, he has served in a variety of roles in Capital One’s Installment Loans, Credit Card, National Small Business Lending, Auto Finance and Mainstreet Card businesses, including serving as President of Capital One Auto Finance from November 2012 to March 2017 and Executive Vice President of Domestic Consumer Card from March 2017 to July 2018.

 

 Celia S. Karam                 

 

 President, Retail Bank

 

 Age: 44

 

Ms. Karam has served as our President, Retail Bank since August 2022. Her organization is focused on building world-class products, capabilities and customer experiences that drive business growth, inspire customer loyalty, and empower the financial well-being of customers. Ms. Karam joined Capital One in July 2006. From July 2006 to June 2018, Ms. Karam served in a variety of roles within Capital One’s Banking and Consumer Credit Card businesses. Key positions include Vice President of Consumer Lending to Retail Bank Customers from January 2012 to June 2013, Managing Vice President of Consumer Bank Products from July 2013 to December 2016, Senior Vice President, Head of Small Business Banking from January 2017 to May 2018. Ms. Karam also served as the company’s Chief Audit Officer from June 2018 to July 2021 and Chief Operating Officer, Card from August 2021 to August 2022.

 

 Frank G. LaPrade, III      

 

 Chief Enterprise Services Officer  and Chief of Staff to the CEO

 

 Age: 55

 

Mr. LaPrade has served as our Chief Enterprise Services Officer since 2010 and Chief of Staff to the CEO since 2004, and is responsible for managing Enterprise Services for Capital One, including Technology, Digital, Design, Enterprise AI/ML Product, Capital One Software, Growth Ventures, Brand, Enterprise Supplier Management, External Affairs, Workplace Solutions, and Corporate Security. Mr. LaPrade joined Capital One in February 1996. Since that time he has served in various positions, including as Capital One’s Deputy General Counsel from 1996 to 2004, responsible for managing the company’s litigation, employment, intellectual property and transactional practice areas.

 

 

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 Mark Daniel Mouadeb    

 

 President, U.S. Card

 

 Age: 39

 

Mr. Mouadeb has served as our President of US Card since July 2022, and is responsible for leading our consumer credit card business in the United States. Mr. Mouadeb has been with Capital One since 2006, and he has served in a variety of roles at Capital One, most recently serving as Executive Vice President, Head of Core Consumer Card from February 2021 to June 2022, as Senior Vice President, Head of Mainstreet Card from July 2020 to January 2021, as Senior Vice President, Head of Walmart Partnership from July 2018 to June 2020 and Managing Vice President, Upmarket Card from July 2017 to June 2018.

 

 Ravi Raghu                       

 

 President, Capital One Software,  International, and Small  Business  Products

 

 Age: 44

 

Mr. Raghu has served as our President, Capital One Software, International, and Small Business Products since July 2022. In this role, Mr. Raghu is responsible for a portfolio of businesses covering Capital One Software, Small Business and Commercial Credit Cards and B2B Payments, as well as consumer credit cards in the UK & Canada. Mr. Raghu began his professional career in Capital One’s Credit Card Division over 20 years ago as a business analyst and has served in a variety of leadership roles at Capital One, most recently serving as Executive Vice President, Head of Capital One Software from July 2021 to July 2022 and previously as Executive Vice President, Head of Dealer Auto Finance from March 2017 to July 2021.

 

 Kara West                         

 

 Chief Audit Officer

 

 Age: 49

 

Ms. West has served as our Chief Audit Officer since August 2021, and is responsible for leading Capital One’s internal audit function, developing audit strategy and overseeing the Company’s control environment. Ms. West has been with Capital One since 2013, serving in a variety of roles, including previously serving as Senior Vice President and Card Chief Risk Officer from November 2017 to August 2021.

 

 Sanjiv Yajnik                    

 

 President, Financial Services

 

 Age: 66

 

Mr. Yajnik has served as our President, Financial Services since June 2009, and is responsible for overseeing Capital One’s Auto Finance business. Mr. Yajnik joined Capital One in July 1998. From July 1998 to June 2009, Mr. Yajnik led several businesses within Capital One, including Capital One Europe, Capital One Canada, and Capital One Small Business Services. Mr. Yajnik became President, Financial Services in June 2009. Prior to joining Capital One, Mr. Yajnik held leadership positions at PepsiCo, Circuit City and Mobil Oil.

 

 Andrew M. Young           

 

 Chief Financial Officer

 

 Age: 48

 

Mr. Young has served as our Chief Financial Officer since March 2021, and is responsible for overseeing Capital One’s finance team and the overall financial management of the Company. Mr. Young joined Capital One in June 1996. Since that time, he has served in a variety of roles at Capital One. Most recently, he was Senior Vice President and Business Line Chief Financial Officer of the Company from April 2018 to February 2021. In this role, he was responsible for managing all lines of business chief financial officer teams as well as enterprise planning and budgeting. Mr. Young also served as the Chief Financial Officer of Capital One, N.A. from July 2018 until February 2021. Prior to his most recent role, he served as Senior Vice President, Head of Corporate Planning and CFO of Infrastructure from January 2015 to April 2018.

 

 Michael Zamsky              

 

 Chief Consumer Credit Officer

 

 Age: 48

 

Mr. Zamsky has served as our Chief Consumer Credit Officer since August 2006, and is responsible for overseeing all aspects of credit management and analytics for Capital One’s Consumer lending businesses. He also leads Enterprise Data Risk Management across the enterprise. Mr. Zamsky has been with Capital One for over 25 years, and he previously served in a number of business and operations leadership roles.

 

 

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Related Person Transactions

Our Board has approved a written Related Person Transaction policy, which sets forth policies and procedures for reviewing, and approving or ratifying, transactions with directors, director nominees, executive officers, stockholders holding 5% or more of Capital One’s voting securities, or any of their immediate family members or affiliated entities (collectively, “Related Persons”). The policy covers transactions, arrangements, and relationships where Capital One is a participant, the aggregate amount exceeds $120,000, and a Related Person has a direct or indirect material interest (“Related Person Transactions”). Under the policy, Related Person Transactions must be approved or ratified by the Governance and Nominating Committee, and may only be ratified or approved if the committee determines the Related Person Transactions are not inconsistent with the best interests of the Company and its stockholders.

In reviewing Related Person Transactions, the Governance and Nominating Committee considers all relevant facts and circumstances, which may include: the benefits to the Company from the transaction; the nature and extent of the Related Person’s interest in the transaction; the impact, if any, on a director’s independence; any implications under Capital One’s Code of Conduct (including whether the transaction would create a conflict of interest or the appearance thereof); any concerns with respect to reputational risk; the availability of other sources for comparable products or services; and the terms of the transaction as compared to the terms available to unrelated third parties or to Capital One’s associates, generally.

The Governance and Nominating Committee has pre-approved the following types of Related Person Transactions as being not inconsistent with the best interests of Capital One and its stockholders: director and executive compensation otherwise disclosed in the Company’s proxy statement and/or approved by the Compensation Committee or the Board; transactions in amounts that are not material and where the relationship arises only from a Related Person’s position as an employee (other than as an executive officer) or a director of, or having immaterial financial holdings in, another entity; and financial services, including loans, extensions of credit, or other financial services and products provided by Capital One to a Related Person that are in the ordinary course, non-preferential, do not involve features unfavorable to the Company, and comply with all applicable laws, rules, and regulations (including the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) and Regulation O of the Board of Governors of the Federal Reserve, and the Federal Deposit Insurance Corporation Guidelines).

From time to time in the ordinary course of its business, Capital One issues loans and provides other financial services and products to directors, executive officers, and/or nominees for director, or to a director’s, executive officer’s, or director nominee’s immediate family member, including persons sharing the household of such director, executive officer, or director nominee (other than a tenant or employee). Such loans and other financial services and products are made in the ordinary course of business; are on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans and financial services and products with persons not related to the Company; and do not involve more than the normal risk of collectability or present other features unfavorable to the Company.

Matthew W. Cooper is Capital One’s General Counsel and Corporate Secretary. Mr. Cooper’s brother-in-law is a partner at the international law firm McGuireWoods LLP (“McGuireWoods”). Capital One has engaged McGuireWoods from time to time in the ordinary course of business and on an arm’s-length basis. The relationship between Capital One and McGuireWoods began before Mr. Cooper was employed by Capital One and also pre-dates Mr. Cooper’s brother-in-law’s association with McGuireWoods. Mr. Cooper’s brother-in-law does not work on any Capital One matters and his ownership in the firm is less than 1%. In 2022, Capital One made aggregate payments to McGuireWoods of approximately $9.8 million for legal services. This relationship was ratified by the Governance and Nominating Committee.

Ravi Raghu is Capital One’s President, Capital One Software, International, and Small Business Products. Mr. Raghu’s spouse is a Senior Business Manager with the Company. Mr. Raghu’s spouse received compensation of approximately $169,000 in 2022, including an annual salary and incentive award commensurate with her qualifications, responsibilities, and other employees holding similar positions. She does not report directly or indirectly to Mr. Raghu. This relationship was ratified by the Governance and Nominating Committee.

 

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Section II - Corporate Governance at Capital One

 

Environmental, Social, and Governance Practices

At Capital One, we embrace the idea that we do well as a company by doing good in the communities we serve. Our approach to ESG matters is constantly evolving to adapt to emerging issues in our industry and society. Last year, we published our inaugural ESG Report, which included a list of 14 focus areas that guide the development of our ESG policies and practices. Highlights of our ESG efforts are summarized below.

Oversight of Environmental, Social, and Governance Matters

Our ESG approach is integrated into our existing governance structure at the Board and management levels of the Company.

Our Board is actively engaged with management on ESG-related issues. In 2022, our Board committees refreshed their committee charters to formalize their ESG roles and responsibilities. The Governance and Nominating Committee has overall responsibility for overseeing policies, programs and strategies related to ESG matters and coordinates such oversight with other Board committees and/or the full Board, as appropriate. The Governance and Nominating Committee also engages with management on ESG matters at least annually. The Governance and Nominating Committee receives updates on investor sentiment, reviews and provides feedback on the Company’s ESG Report, and engages on other ESG initiatives.

Board Level Oversight

An overview of the Board’s oversight of ESG matters is provided below:

 

Board of Directors
 

The full Board oversees all enterprise business operations and ensures efficient and effective oversight of the Company’s strategic direction, including the development and implementation of ESG-related objectives. The Board engages with its committees and management on significant strategic and risk-related ESG matters including certain aspects of climate strategy, diversity, inclusion and belonging (“DIB”) efforts, and human capital management.

 

Board Committees
       

Governance and

Nominating Committee:

 

Has overall responsibility for Board and committee engagement with, and oversight of, Capital One’s ESG-related policies and programs.

 

 

Risk

Committee:

 

Oversees risks within Capital One’s risk management framework, including risks related to ESG strategy and activities.

 

 

Audit

Committee:

 

Oversees management compliance with ethical standards and ESG-related information in SEC filings.

 

Compensation

Committee:

 

Oversees compensation policies and practices including the consideration of ESG in executive compensation.

Senior Management Level Oversight

At the management level, ESG-related risk management is integrated across our risk management framework. Senior management committees and other management-level committees oversee ESG matters. The ESG Advisory Committee is a cross-functional, management-level committee that meets regularly to discuss ESG initiatives and advise the ESG Accountable Executive, who is currently our General Counsel and Corporate Secretary. Among other things, the ESG Advisory Committee guided the development and publication of our first-ever ESG Report in September 2022. In November 2022, we formalized the governance practices of this Committee in a charter.

 

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An overview of management’s oversight of ESG matters is provided below:

 

Senior Management and Management-Level Committees
       

ESG Advisory Committee:

 

Forum for senior executives from across the Company to discuss and guide policies, programs, activities, and initiatives.

 

Executive Risk

Committee:

 

Forum for integrated discussions by senior management regarding risk management and alignment of risk management activities across all risk categories, including certain risks related to ESG, as appropriate.

 

 

Executive                

Committee:

 

Advises and assists the CEO in management of corporate strategy and operations, including ESG initiatives.

 

Disclosure

Committee:

 

Reviews ESG-related information in SEC disclosures as well as the ESG Report.

Dedicated ESG Executives

Enterprise Head of ESG

We have designated our current General Counsel and Corporate Secretary as the enterprise Head of ESG. This individual coordinates ESG strategies and activities at the enterprise level, chairs the ESG Advisory Committee and provides regular updates to the Board regarding the Company’s ESG strategy, plans and activities.

Head of Climate

We have also designated a Senior Advisor to the CEO to serve as the Head of Climate for Capital One. This individual leads a team that meets regularly to develop and review corporate strategy on emerging climate issues such as GHG emissions, climate regulations, and climate-related challenges and opportunities in our lines of business and across the enterprise.

Our People

Since Capital One’s founding, our success has been rooted in our culture of putting people first. For our customers, we believe that our products are innovative, simple to use, and deliver tremendous value for individuals of all backgrounds. Our more than 55,000 associates unleash their talents to deliver on our mission to bring ingenuity, simplicity, and humanity to banking. We strive to empower our talented associates to grow in their careers as they take on new roles, learn valuable skills, receive candid and actionable feedback, and meet personalized development goals. We’ve invested significantly in learning programs, resources, and technology with the goal of developing people to reach their highest potential, cultivate role expertise, create the workforce of the future, and accelerate business impact.

For Our Associates

 

U.S. Workforce by the Numbers (as of December 31, 2022)

 

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52% racially/ethnically diverse    51% women    92% of surveyed associates are proud to work for Capital One

 

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Highlights of “Our People” programs for our associates include the following:

 

 

   

Diversity, Inclusion & Belonging. We strive to make Capital One a place where everyone feels seen, heard, and valued, and an organization where each associate has an equal opportunity to succeed. We empower our associates to do great work by creating an inclusive culture of belonging that values diverse perspectives, fosters collaboration, and encourages innovative ideas. Our Chief Diversity, Inclusion & Belonging Officer oversees all diversity and inclusion efforts and engages regularly with our CEO, Board, and senior management team. Growing the diversity of our workforce at all levels, with an emphasis on leader and executive roles, is an important component of our comprehensive DIB strategy. We remain focused on recruiting, developing, and elevating diverse talent on our journey to full representation. Our Compensation Committee uses DIB as a Performance Factor (as defined on page 100) to help determine the year-end incentive for our NEOs.

 

   

Business Resource Groups (“BRGs”). We believe in creating a culture that values and celebrates all perspectives, and we encourage all associates to participate in our eight enterprise and four Tech BRGs as a member or as an ally. BRGs are associate-led organizations committed to attracting, developing, engaging, and retaining our diverse workforce and enhancing the richness of our workplace for all associates. Each BRG has an Executive Committee sponsor. BRGs are open to associates of all identities, and more than 60% of U.S. associates and 55% of associates globally belong to at least one BRG.

 

   

Competitive Pay and Benefits. Capital One is proud to offer our Total Rewards program, combining unique benefits and compensation offerings to attract and retain the world’s best talent. Our competitive benefits, such as generous parental leave, on-site health centers, flexible work solutions, company contributions to associates’ 401(k) plans, educational assistance, and other physical and mental health, wellness, and financial benefits, are designed to help associates grow inside and outside of the workplace.

 

   

Pay Equity. Pay equity has long been a core tenet of our pay philosophy and is central to our values. We review groups of associates in similar roles, accounting for factors that appropriately explain differences in pay such as job location and experience. Based on this annual analysis, our most recent results show that through our efforts we continue to pay women globally 100% of what men are paid, and in the U.S. we continue to pay racially/ethnically diverse associates 100% of what white associates are paid.

 

   

Learning and Development. At Capital One, we celebrate curiosity, lifelong learning, and the growth potential of all our associates. We’ve set out to build a world-class development culture designed to empower all to learn. In 2022, Capital One delivered 3.6 million online and instructor-led courses for our associates and contractors through our intuitive learning platforms—One Learn and Learning Hive—that enable associates to search and engage with a variety of learning plans and online training.

For Our Customers

Highlights of “Our People” programs for our customers include the following:

 

   

Innovative Products that Help Customers Succeed. We seek our customers’ insights and stay attuned to their candid feedback to deliver innovative products and tools that meet their changing needs and help them succeed financially. We are making it easier for our customers to use credit wisely with customer alerts from our CreditWise tool, available for customers and non-customers, which helps them understand, monitor, and improve their credit scores; and with our Capital One mobile application, which includes purchase alerts and enhanced controls for security and fraud prevention. Additionally, our intelligent financial assistant, Eno, delivers proactive insights that help users save money and detect fraud while interacting in a conversational way.

 

   

Business Ethics and Responsible Business Practices. Our Code of Conduct memorializes Capital One’s commitment to comply with applicable laws and regulations governing our operations, and to earn our reputation for honesty, fair dealing, and integrity every day. In addition, the Corporate Compliance team develops training courses on a range of related topics such as compliance awareness training, ethical business practices, combating illegal conduct (including financial crimes), regulatory compliance, financial product safety and consumer protection, and business continuity planning.

 

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Consumer Privacy. As a business that relies on trust, Capital One is committed to protecting consumer privacy and their confidence in our ability to safeguard personal and financial information. We collect information to better serve our customers and potential customers. Depending on how consumers interact with us, they have the ability to make certain choices regarding our collection, use and sharing of their information. In addition, some of their data is made available for copy, download, or deletion, upon consumer request.

 

   

Elimination of Overdraft Fees. In 2021, we became the first top-ten retail bank to provide free overdraft protection and eliminate all overdraft and non-sufficient funds fees for all consumer banking customers. Overdraft protection is a valuable and convenient feature and can be an important safety net for families.

Awards and Recognition

Our people, practices, and policies continue to be recognized by a wide range of publications and benchmarking institutes. These awards are often based on what our associates say about working at Capital One:

 

Canada’s Top Employers for Young People

 

 

Great Place to Work’s Best Workplaces for Parents

 

Dave Thomas Foundation® Best Adoption-Friendly Workplaces

 

 

Greater Toronto’s Top 2022 Employers

 

Fortune 100 Best Companies to Work For®

 

 

PEOPLE Companies That Care

 

Fortune Best Workplaces for Millennials

 

 

Wall Street Journal Top 250 Best-Managed Companies of 2022

 

Fortune Best Workplaces for Women

 

 

Our Community

The community programs and partnerships we pursue integrate Capital One’s core strengths with the skills, expertise, and experiences of others to make real and lasting change. We are an engaged partner with a network of nonprofit organizations and local leaders who develop workforce opportunity, support small and micro-businesses, develop affordable housing, and work to improve financial well-being.

 

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More than 900 Capital One associates engaged in pro bono volunteerism — supporting 162 unique community partners in 2022

  $70 million donated in 2022 to more than 1,400 nonprofits that help build economic opportunity in our communities   14,050 associates volunteered over 250,000 volunteer hours in our communities in 2022

Highlights of our community engagement efforts include the following:

 

   

Commitment to Socioeconomic Mobility. Capital One’s One Impact Initiative is an initial $200 million, five-year commitment to support growth in underserved communities and advance socioeconomic mobility by closing gaps in equity and opportunity. The Impact Initiative reflects Capital One’s core mission to Change Banking for Good, and our Company’s priorities around racial equity, affordable housing, small business support, workforce development, and financial well-being.

 

   

Capital One joined forces with Strive USA, a new program led by the Mastercard Center for Inclusive Growth to provide support for five million businesses over the next five years, with a focus on underserved business owners. Strive USA will support and enhance delivery of federal dollars

 

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dedicated to small business growth. Our Company began working with Strive USA as a founding member of the Economic Opportunity Coalition, a public and private effort to align billions in investments to underserved communities.

 

   

In 2022, a team of business analysts and data scientists at Capital One volunteered to assist Feed More, a food bank that collects, prepares, and distributes food to bring hunger relief throughout Central Virginia. The partnership was intended to assist Feed More with getting a deeper understanding of food insecurity during the pandemic. Capital One associates worked alongside Feed More to build and pilot a sustainable data model that assesses risk of food insecurity. Through a new model created by Capital One, Feed More has enhanced granularity and frequency of meal-gap data. Specifically, Feed More now has data at the zip code-level (vs. county-level) and is able to obtain data monthly (vs. a multi-month lag time). The model provided actionable insights to Feed More, which in turn has helped enable them to make data-driven operational decisions, assess the effectiveness of those decisions over time, and guide future strategic planning.

 

   

Capital One is assisting the Black Economic Alliance Foundation (“BEA Foundation”) in its journey to build a comprehensive data tool to analyze and reliably predict the impact of investments and interventions in the Black community. This simulation tool will better support real-time data that reflects and provides critical context on the current circumstances facing these communities. This technology, enables the BEA Foundation to forecast the most impactful ways that businesses and lawmakers can execute strategies and construct interventions that exponentially increase future wealth building in the Black community in the future. It will also highlight gaps in the market, in turn providing real-time opportunities for the private, social, and public sectors to take action to invest in impactful pipeline building. Ultimately, the hope for this development is to ensure consistent and rigorous assessment across stakeholders and help leaders take better-informed action to support Black economic prosperity.

 

   

Building upon our longstanding support to five nonprofits in the Washington, D.C. area working to advance college access and workforce development, Capital One helped stand up the Talent for Tomorrow Alliance. This organization is the first collaborative group in Washington, D.C. to convene multiple nonprofits supporting workforce development. This unique collaborative model brings an innovative approach to co-developing solutions for the community through sharing resources and promoting individuals graduating from one program and going on to the next.

 

   

Affordable Housing and Community Development. We provide a comprehensive approach to affordable housing, which is a central part of our focus on building healthy, thriving communities. Our Community Finance team manages a $6 billion loan and investment portfolio focused on affordable rental housing through which we provide capital to finance affordable housing developments built by nonprofits, local agencies, and specialty developers. We bring financial expertise to developments with multiple public and private funding sources. This allows us to address critical community needs through customization and innovation.

 

   

Capital One’s Community Finance team financed the construction of Terwilliger Place, which became Virginia’s largest affordable housing development for veterans. This development comes as the result of a longstanding relationship between Arlington Partnership for Affordable Housing (“APAH”) and Capital One. Since 2011, Capital One has supported APAH’s effort to bring 450 affordable housing units to the Washington, D.C. area as part of the bank’s broader commitment to affordable housing. The Arlington, Virginia, building is billed as the first Housing Credit development in the state with a leasing preference for veterans. It offers 160 units of affordable housing with half of those units set aside for veterans.

 

   

Supporting Community Development through the New Markets Tax Credit Program. Capital One participates in the New Markets Tax Credit (“NMTC”) program—a federal initiative that provides incentives for private investment and development in economically distressed communities through federal tax

 

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credits. The Company’s efforts come to life as a lender and investor of more than $3.8 billion in structured investments, and as an allocatee through its community development entity (“CDE”), Capital One Community Renewal Fund (“COCRF”). In 2022, Capital One financed 27 NMTC projects and invested nearly $439 million of capital in projects that increased access to food and shelter, provided more equitable health and education facilities, and created quality jobs.

 

   

Since establishing its CDE in 2005, Capital One has helped shape the impact of the federal NMTC program through supporting organizations such as the Historic District Development Corporation (“HDDC”). In 2022, COCRF provided $3 million in federal allocation towards a $30.5 million New Markets Tax Credit transaction towards the development of The Front Porch – a 100,000 square foot development of a mixed-use space in Atlanta. As HDDC moves into commercial development, it will focus on sustaining local businesses integral to the historic culture of the area, providing technical assistance for entrepreneurs and the incorporation of sustainability, urban agriculture and community wealth building initiatives. Additionally, it will include 40 units of affordable rental housing, as well as 14 for-sale condominium units to encourage asset building.

 

   

Commitment to Diversity. Capital One is committed to increasing the number of candidates and new hires from underrepresented groups across the Company and developing a diverse talent pipeline. We remain focused on growing relationships, investment and campus presence at Historically Black Colleges and Universities (“HBCUs”) and Hispanic-Serving Institutions (“HSIs”) in the United States and expanding talent pipelines in Canada and the United Kingdom. We are proud to work with our HBCU and HSI partners: Delaware State University, Florida A&M University, Florida International University, Howard University, North Carolina A&T University, Prairie View A&M University, Paul Quinn College, Southern University, Spelman College, University of Puerto Rico-Mayaguez and Xavier University.

 

   

In 2022, we unveiled Delaware State University Riverfront, a $4.7 million facility donated to Delaware State University. The project is a shining example of the critical role public-private partnerships play in strengthening HBCU infrastructure and expanding graduates’ career pathways.

 

   

Capital One also hosted the inaugural HBCU and HSI Presidents’ Roundtable, engaging with educational and government leaders and deepening our relationships. We also sponsored the Hispanic Scholarship Fund’s National Leadership Conference, which provides students an inside track to academic and professional excellence through a combination of mentoring, professional insights and career guidance.

 

   

Community Advisory Council (“CAC”). We continue to consult with our CAC which directly engages our senior leadership with civic leaders, community representatives, and consumer advocates from nearly 30 organizations. The CAC provides a variety of perspectives and facilitates informed dialogue on the Company’s strategy, products, and services—especially those related to underserved communities. In 2022, business leaders sought input from CAC members about initiatives that are meant to promote socioeconomic mobility for our customers. For example, leaders invited feedback on Capital One’s new Ventures Lending platform. Ventures Lending will provide credit to small business owners in low and moderate income communities who have been historically underserved.

Our Environmental Footprint

Capital One is committed to continuously improving the environmental sustainability of our business, and we recognize the wide-ranging impact that climate change will have on the world. We are focused on embedding climate-related considerations throughout our strategy and risk management. We are supplying solutions that our customers and communities will need to thrive in a changing world, and continue to engage our associates, customers, suppliers, and other stakeholders in our environmental efforts.

Our sustainability journey began over a decade ago with the establishment of our Environmental Sustainability Office. Since then, we have set and achieved multiple goals to improve the sustainability of our business

 

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operations. We are currently working on our 4th generation GHG reduction goal, which was informed by the Science Based Targets Initiative (SBTi) and aligns with a 1.5°C target ambition, but has not been reviewed by that organization.

In 2021, we named a Senior Advisor to the CEO with previous senior management experience in risk, strategy and line of business leadership at Capital One, to serve as the Head of Climate for the enterprise. The Head of Climate is responsible for the formulation and coordination of our enterprise climate strategy.

In 2022, we advanced our work to improve the sustainability of our internal operations, understand the financed emissions of our customers, educate consumers, identify and manage climate risks, and work with businesses to develop and finance sustainable solutions.

Our Strategy and Goals

Capital One is committed to the following goals:

 

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Reduce Scope 1 Direct Emissions by 50 percent and reduce Scope 3 Emissions (Categories 1-14) by 50 percent by 2030 (from a baseline year of 2019).   Purchase 100 percent renewable electricity while increasing location-aligned procurement in the markets where we operate.   Reduce water use at our facilities
by 20 percent by 2025 (from a baseline year of 2019).

 

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Continue to ensure 95 percent of paper purchased for operations is certified by the Forest Stewardship Council or contains 30 percent post-consumer waste recycled content each year.    Pursue the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Silver or higher certification for all new office construction and comprehensive renovations.    Reduce landfill waste generated at our campus locations by 50 percent by 2025 (from a baseline year of 2019)

Highlights of our environmental sustainability efforts include:

 

   

Operational Emissions. In an effort to continue our reduction in operational emissions, we performed an analysis in 2022 to gain a deeper understanding of the key business drivers and leverage points that impact these emissions. This analysis is helping to align our action plans with continued progress towards our GHG emissions reduction goals, while also building the foundation to evaluate potential future reductions in these emissions.

 

   

Internal Price on Carbon. In 2020, Capital One established an internal price on carbon starting at $15.00 per metric ton of carbon dioxide equivalent, or CO2e, for Scope 1, Scope 2 and verified Scope 3 (in categories 1-14) emissions. This carbon fee creates a monetary value on the GHG emissions in our carbon footprint, which can enable greater visibility and incentive alignment in the future.

 

   

Financed Emissions. Financed emissions are the GHG emissions associated with our lending activities and investments (Scope 3, category 15). In 2022, we engaged with a third party to better understand the drivers and impact of our financed emissions. We have completed an initial assessment of our financed emissions and significant concentrations. While this initial assessment is reliant on data from multiple sources, including our clients, that is not fully complete, and does not currently have the same level of controls as our public emissions disclosures, it is useful to help guide our work within our businesses

 

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toward the areas of highest leverage. We will also be working to refine our methodologies, data and controls, and identify the long-term processes and infrastructure required to support potential future disclosures of these emissions.

 

   

Green Auto Hub. Capital One launched Green Auto Hub in 2022 to educate consumers on the benefits of electric and hybrid options. Consumers now have the opportunity to learn more about the vehicle types, maintenance, battery, range and tax incentives, as well as the impact on the environment and their cost savings.

 

   

Sustainable Finance. Our Commercial Bank has a dedicated Sustainable Finance team that works to assess and address the risks and opportunities posed by the changing environmental and social landscape to best prepare our clients and our business. While we remain rooted in our local communities, we have scaled nationally and invested in our capabilities to support Commercial Bank clients who desire to transition to a low-carbon economy. Our Sustainable Finance team also analyzes sustainable finance capital markets trends and advises teams across our Commercial Bank on financing products that align with their clients’ sustainability strategies. Any references to “sustainable finance” in this report are intended as references to the internally defined criteria of Capital One only and not to any jurisdiction-specific regulatory definition.

Climate Governance

As we’ve progressed in our environmental sustainability journey, we’ve taken steps to enhance our governance and oversight of our climate-related bodies of work. We have also instituted several climate-specific governance processes at both the enterprise and line of business levels, which roll up through our broader enterprise ESG governance structure.

The Board is actively engaged in the development of Capital One’s enterprise climate strategy and risk management, including climate-related goals and targets. The Board receives updates from management on our enterprise-wide climate strategy and risk management at least once per year. Capital One’s senior leadership also integrates climate considerations into individual line of business strategies where appropriate. Climate and other ESG-related issues are also discussed in existing senior management committees at Capital One. For more information on climate governance see “Oversight of Environmental, Social and Governance Matters” beginning on page 48.

Climate Risk Management

Capital One looks at how risks, including climate-related risks, could impact our Company across seven risk categories each quarter. We also identify emerging risks that may occur across a longer time horizon, happen in the future, or have a potential impact that is difficult to predict. The seven risk categories we use to evaluate climate risks are consistent with those we use to evaluate and manage all of our enterprise risks: credit, operational, strategic, reputational, market, liquidity and compliance risks.

As we continue to enhance climate risk management capabilities, and in alignment with emerging regulatory guidance, we will conduct climate-specific scenario analysis to better understand the long-term impact of climate change on our portfolios. We will also continue to improve our risk identification process to take climate-related risks into consideration when making decisions across the enterprise.

 

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How to Contact Us

 

 Our Directors

  

Investor Relations

Communicate with the Board, including individual directors, the Lead Independent Director, committee chairs, or the Independent Directors as a group

 

Mail correspondence to:

 

Board of Directors

c/o Corporate Secretary’s Office

Capital One Financial Corporation

1600 Capital One Drive

McLean, Virginia 22102

  

Contact our Investor Relations team

 

Email: investorrelations@capitalone.com

The Corporate Secretary will review all communications sent to the Board, the Lead Independent Director, committee chairs, the Independent Directors as a group, or individual directors and forward all substantive communications to the appropriate parties. Communications to the Board, the Independent Directors, or any individual director that relate to Capital One’s accounting, internal accounting controls, or auditing matters are referred to the Chair of the Audit Committee and Capital One’s Chief Audit Officer. Other communications are referred to the Lead Independent Director. Please continue to share your thoughts or concerns with us. We value your input and your investment.

 

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Section III - Approval of Amendments to Capital One Financial Corporation’s Restated Certificate of Incorporation to Remove Remaining Supermajority Voting Requirements and References to Signet Banking Corporation (Item 2 on Proxy Card)

 

 

Overview

The Board of Capital One recommends that Capital One’s stockholders approve amendments to Capital One’s Restated Certificate of Incorporation (the “Certificate”) (i) to remove the remaining supermajority voting requirements currently in the Certificate and replace them with majority voting standards; (ii) to expressly opt out of a default supermajority provision under Delaware law; and (iii) to remove references to Signet Banking Corporation, in each case as described below (together, the “Proposed Amendments”). Capital One previously proposed amendments at our 2013 and 2014 Annual Stockholder Meetings to remove the supermajority voting requirements currently in the Certificate, however, the proposals did not receive the required number of votes to pass. In connection with those meetings, we actively solicited stockholders to vote for the amendments, including engaging directly with some of our largest stockholders. While non-Interested Stockholders (as defined in the Certificate) owning 79.99% of the then outstanding Voting Stock (as defined below) voted in favor of the amendments in 2013 and 77.44% in 2014, respectively, these levels of support were not sufficient to approve the amendments, each of which required an affirmative vote of 80% of the then outstanding Voting Stock excluding any Interested Stockholder. The Board of Directors believes that the amendments as set forth below are appropriate and we are asking stockholders to vote “For” these Proposed Amendments.

References in this discussion to votes of the outstanding shares and to the “Voting Stock” mean the Company’s outstanding shares of capital stock entitled to vote generally in the election of directors. Currently, Capital One common stock is the only class or series of Voting Stock outstanding. The Proposed Amendments do not affect the voting rights of the Company’s preferred stock.

If the amendments to the Certificate are approved at this meeting, our Certificate or our Amended and Restated Bylaws will not contain any supermajority provisions. We strongly encourage you to vote “FOR” this proposal.

Purpose and Effect of the Proposed Amendments

The Proposed Amendments are the result of the Board’s ongoing review of our corporate governance principles. After receiving stockholder input and the advice of management and outside advisors, the Board considered the relative weight of the arguments in favor of and opposed to supermajority voting requirements related to certain business combinations.

The Board recognizes that supermajority voting requirements for business combinations are intended to protect against self-interested action by large stockholders, including in the context of hostile acquisitions that may be viewed as undervaluing the Company, by requiring broad stockholder support for certain types of transactions or governance changes. The Board also recognizes that many investors and others have begun to view supermajority vote provisions as conflicting with principles of good corporate governance.

Accordingly, the Board has considered this matter and, upon recommendation of the Governance and Nominating Committee, adopted resolutions setting forth the Proposed Amendments, declared the Proposed Amendments advisable and unanimously resolved to submit the Proposed Amendments to Capital One’s stockholders for consideration.

 

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Section III - Approval of Amendments to Capital One Financial Corporation’s Restated Certificate of Incorporation to Remove Remaining Supermajority Voting Requirements and References to Signet Banking Corporation (Item 2 on Proxy Card)

 

 

 

Proposed Certificate Amendments

Remove Supermajority Voting Requirements Related to Certain Business Combinations

Description of Amendments

Currently, Article IX of the Certificate has supermajority voting provisions applicable to certain business combinations between Capital One and Interested Stockholders and requires that: (i) any such business combinations be approved by 75% of the outstanding Voting Stock (including 75% of non-Interested Stockholders) and (ii) an amendment of any provision of Article IX, including the supermajority voting provision, be approved by 80% of the outstanding Voting Stock (including 80% of non-Interested Stockholders).

We propose to amend the Certificate so that such transactions or amendments can be approved by a majority vote of the voting power of the then outstanding Voting Stock, voting together as a single class. Specifically, we propose:

 

   

to amend the supermajority voting requirements for approval of certain business combinations currently in Article IX, Section 1, Paragraph (A) of the Certificate by replacing the references to “75%” with “a majority;” and

 

   

to amend the supermajority voting requirements for amending or repealing, or adopting any provision inconsistent with Article IX of the Certificate (regarding the approval of certain business combinations) currently in Article IX, Section 6 of the Certificate by replacing the references to “80%” with “a majority.”

If these amendments are approved, future stockholder votes under these provisions would require the affirmative vote of the holders of at least a majority of the voting power of the then outstanding Voting Stock, voting together as a single class, including the affirmative vote of the holders of at least a majority of the voting power of the then outstanding Voting Stock not owned directly or indirectly by any Interested Stockholder. The amended voting requirements in Article IX, Section 1, Paragraph (A) for approval of certain business combinations would continue to be required in addition to any affirmative vote required by law or the Certificate (including any votes required by the terms of any series of preferred stock).

Opt out of Section 203 of the Delaware General Corporation Law (“DGCL”)

Description of Amendments

Currently, we are subject to a default supermajority provision under DGCL 203, which relates to stockholder approval of business combinations with interested stockholders, requiring the affirmative vote of at least 66 23% of the outstanding voting stock that is not owned by the interested stockholder. Specifically, Section 203(a)(3) of the DGCL states that: “At or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 23% of the outstanding voting stock which is not owned by the interested stockholder” (the “66 23% Level”). We propose to amend the Certificate so that the Company will expressly elect not to be governed by the DGCL 203, in order to eliminate the 66 23% Level.

Remove the Reference to Signet Banking Corporation and its Affiliates

Description of Amendments

Currently, Article IX, Section 3 of the Certificate states that Signet Banking shall not be deemed an Interested Stockholder as long as it continues to control more than a majority of the outstanding voting stock of the Company (each term as defined in the Certificate). Signet Banking was created from the merger of Bank of Virginia and Union Trust Bancorp in 1985. In 1995, Signet Banking spun off its credit card business as Capital One and in 1997, First Union acquired Signet Banking. Signet Banking no longer exists and we propose to remove the reference to Signet Banking.

 

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Section III - Approval of Amendments to Capital One Financial Corporation’s Restated Certificate of Incorporation to Remove Remaining Supermajority Voting Requirements and References to Signet Banking Corporation (Item 2 on Proxy Card)

 

Vote Required to Approve the Proposed Amendments

As required in the Certificate, the Proposed Amendments will need to be approved by the affirmative vote of the holders of at least 80% of the voting power of the shares of the then outstanding Voting Stock voting together as a single class (including the affirmative vote of the holders of at least 80% of the voting power of the then outstanding Voting Stock not owned directly or indirectly by any Interested Stockholder, with abstentions and broker non-votes having the same effect as votes “against” the Proposed Amendments. Under the Certificate, the term “Interested Stockholder” includes any person or entity who or which, together with its affiliates, is the beneficial owner, directly or indirectly, of more than 5% of the then outstanding Voting Stock, with beneficial ownership being determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934 and including any shares a person or entity has the right to acquire or to vote.

Additional Information

The general descriptions of the Proposed Amendments set forth above are qualified in their entirety by reference to the text of the Proposed Amendments, which are attached as Appendix B to this proxy statement. Additions to the Certificate are indicated by underlining and deletions are indicated by strike-outs. Complete copies of the Certificate and Bylaws are available at www.capitalone.com under “Investors,” then “Governance & Leadership,” then “Organizational and Governance Documents.”

If any of the Proposed Amendments are approved, such approved amendments will become effective upon the filing of a Certificate of Amendment to Capital One’s Certificate with the Delaware Secretary of State. However, in accordance with Delaware law, even if Capital One’s stockholders approve the Proposed Amendments, the Board has the discretion not to implement them. If the Board exercises such discretion, it will publicly disclose that fact and the reason for its determination.

***

The Board unanimously recommends that you vote “FOR” the proposal in order to amend our Restated Certificate of Incorporation set forth herein.

 

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Section IV - Director Compensation

 

 

Director Compensation Objectives

The Board approves the compensation for non-management directors based on recommendations made by the Compensation Committee (“Committee”). The Board has designed the director compensation program to achieve four primary objectives:

 

   

Attract and retain talented directors with the skills and capabilities to perpetuate Capital One’s success

 

   

Fairly compensate directors for the work required in a company of Capital One’s size, industry and scope

 

   

Recognize the individual roles and responsibilities of the directors

 

   

Align directors’ interests with the long-term interests of our stockholders

Management directors do not receive compensation for their service on the Board. In 2022, Mr. Fairbank was Capital One’s only management director.

Director Compensation Procedures

The Committee annually reviews the compensation program for Capital One’s non-management directors. FW Cook provides competitive compensation data and director compensation program recommendations to the Committee to assist in determining its recommendation. The competitive compensation data includes information regarding the compensation (cash, equity, and other benefits) of the non-management directors within Capital One’s peer comparator group. The Committee considers this information and FW Cook’s recommendations, and finalizes a proposed director compensation structure for review and approval by the full Board, typically in the second quarter of each year. See the discussion under “Compensation Committee Consultant” beginning on page 43 for further information on the role and responsibilities of FW Cook and “Peer Groups” beginning on page 115 for further information on the selection of the Company’s peer comparator group.

Based on its review of competitive market data and guidance from FW Cook in the second quarter of 2022, the Committee determined that the Company’s director compensation program meets the objectives listed above.

Director Compensation Structure

On May 4, 2022, the Board approved a compensation program for Capital One’s non-management directors for the period from May 5, 2022 through our 2023 Annual Stockholder Meeting that is similar to the program for the preceding year. The compensation program consists of an annual cash retainer of $90,000 for service on the Board. Annual cash retainers for service as a member of the Board have not increased since 2013. In addition, directors receive annual cash retainers for committee service and for service as committee chairs and Lead Independent Director. Under the most recently approved director compensation program, the annual cash retainers are as follows:

 

   

Lead Independent Director: $100,000

 

   

Chair of the Audit Committee or Risk Committee: $70,000

 

   

Chair of the Compensation Committee: $45,000

 

   

Chair of the Governance and Nominating Committee: $45,000

 

   

Member of the Audit Committee or Risk Committee (other than the chair): $30,000

 

   

Member of the Compensation Committee or Governance and Nominating Committee (other than the chair): $15,000

 

   

Member of the Capital One, N.A. Trust Committee: $10,000

 

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Section IV - Director Compensation

 

Pursuant to the annual compensation review process described above, the Compensation Committee recommended, and the Board approved, an increase in the annual cash retainer of $50,000 for the Lead Independent Director, of $10,000 for the chairs of the Audit Committee, Risk Committee, and Governance and Nominating Committee and of $5,000 for the chair of the Compensation Committee, each over the previous year. The increases to the annual cash retainers was in recognition of the demands of service of each such positions, including the time commitment and level of contribution expected, and to further align compensation for such service with the Company’s peer comparator group.

In addition, each non-management director serving on May 5, 2022, received on such date an award of 1,612 RSUs under the 2004 Stock Incentive Plan with a grant date fair value of $210,092, or $130.33 per share. The RSU award reflects an approximately $10,000 increase in value over the previous year, which was intended to better align director compensation with the Company’s peer comparator group. The RSUs were valued based on the fair market value of a share of Capital One common stock on the date of grant and vest one year from the date of grant, with the delivery of the underlying shares deferred until the director’s service with the Board ends in order to enhance the alignment of interests between our non-management directors and stockholders.    

Other Benefits

Under the Capital One Financial Corporation Non-Employee Directors Deferred Compensation Plan, non-management directors may voluntarily defer all or a portion of their cash compensation and receive deferred income benefits. Participants in the plan can direct their individual deferrals among ten investments available through the plan. Participating directors receive their deferred income benefits in cash when they cease serving as directors, upon certain other distribution events specified in the plan, or at such earlier time as authorized by the Compensation Committee. Upon a change of control, Capital One will pay to each director within 30 days of the change of control a lump sum cash payment equal to such director’s account balance as of the date of the change of control.

Capital One also offers non-management directors the opportunity to direct a contribution of up to $10,000 annually from Capital One to charitable organization(s) of their choice. Nine of the eleven non-management directors who served during 2022 elected to make such a charitable contribution in 2022. In addition, all directors who served during 2022 were eligible, and six directors elected, to participate in a Capital One broad-based charitable contribution program, which is available to Capital One associates, under which Capital One made a contribution of $5,000 per director to a charitable organization of their choice.

Directors also receive reimbursements for certain board-related expenses, including external educational seminars and travel-related costs incurred to attend Board meetings. Such reimbursements are not included as compensation for the directors in the table below.

 

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CORPORATE GOVERNANCE

 

Section IV - Director Compensation

 

Compensation of Directors

Directors of Capital One received the following compensation in 2022:

 

 Director Name

 

 

 Fees Earned or  
 Paid in Cash(1) 

 

 

Stock 
  Awards(2)   

 

 

All Other 

 Compensation(3)  

 

      Total      

 

 

 Richard D. Fairbank(4)

 

 

 

 

 

$—

 

 

 

 

 

 

 

 

$—

 

 

 

 

 

 

 

 

$—

 

 

 

 

 

 

 

 

$—

 

 

 

 

 

 Ime Archibong

 

 

 

 

 

$105,000

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$—

 

 

 

 

 

 

 

 

$315,092

 

 

 

 

 

 Christine Detrick

 

 

 

 

 

$112,500

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$—

 

 

 

 

 

 

 

 

$322,592

 

 

 

 

 

 Ann Fritz Hackett

 

 

 

 

 

$250,000

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$15,000

 

 

 

 

 

 

 

 

$475,092

 

 

 

 

 

 Peter T. Killalea

 

 

 

 

 

$135,000

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$10,000

 

 

 

 

 

 

 

 

$355,092

 

 

 

 

 

 Eli Leenaars(5)

 

 

 

 

 

$190,000

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$10,000

 

 

 

 

 

 

 

 

$410,092

 

 

 

 

 

 François Locoh-Donou

 

 

 

 

 

$147,500

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$15,000

 

 

 

 

 

 

 

 

$372,592

 

 

 

 

 

 Peter E. Raskind

 

 

 

 

 

$170,000

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$15,000

 

 

 

 

 

 

 

 

$395,092

 

 

 

 

 

 Eileen Serra

 

 

 

 

 

$150,000

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$15,000

 

 

 

 

 

 

 

 

$375,092

 

 

 

 

 

 Mayo A. Shattuck III

 

 

 

 

 

$130,000

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$15,000

 

 

 

 

 

 

 

 

$355,092

 

 

 

 

 

 Bradford H. Warner

 

 

 

 

 

$185,000

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$15,000

 

 

 

 

 

 

 

 

$410,092

 

 

 

 

 

 Catherine G. West(6)

 

 

 

 

 

$110,342

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$—

 

 

 

 

 

 

 

 

$320,434

 

 

 

 

 

 Craig Anthony Williams

 

 

 

 

 

$127,500

 

 

 

 

 

 

 

 

$210,092

 

 

 

 

 

 

 

 

$10,000

 

 

 

 

 

 

 

 

$347,592

 

 

 

 

 

(1)

Represents cash payments made during 2022, which include half of the payments made under the compensation program for the period from May 5, 2022 through our 2023 Annual Stockholder Meeting and half of the payments made under the compensation program for the period from May 6, 2021 through the date of our 2022 Annual Stockholder Meeting.

 

(2)

Represents the grant date fair value of RSUs granted during 2022, calculated in accordance with FASB ASC Topic 718.

 

(3)

Amounts shown represent contributions made by Capital One on behalf of certain non-management directors serving during 2022 to charitable organization(s) of their choice. See “Other Benefits” on page 61 for more information.

 

(4)

Management directors do not receive compensation for their service on the Board. In 2022, Mr. Fairbank was Capital One’s only management director.

 

(5)

In addition to the standard compensatory arrangement described above, Mr. Leenaars receives an increase of $25,000 to the annual cash retainer in recognition of the additional time and effort that is required for Mr. Leenaars to travel internationally to attend Board and committee meetings.

 

(6)

Ms. West unexpectedly passed away on July 30, 2022. Amounts shown represent cash compensation and RSUs earned for her 2022 service through the date of her passing.

 

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CORPORATE GOVERNANCE

 

Section IV - Director Compensation

 

The following table shows the number of RSUs outstanding and the total number of stock options outstanding for each non-management director as of December 31, 2022:

 

   
 Director Name Number of Outstanding
Restricted Stock Units

Number of Outstanding

Stock Options(1)

 

 Ime Archibong

 

 

 

3,266

 

 

 

 

 

 

 Christine Detrick

 

 

 

2,258

 

 

 

 

 

 

 Ann Fritz Hackett

 

 

 

51,877

 

 

 

 

 

 

 Peter T. Killalea

 

 

 

14,667

 

 

 

 

 

 

 Eli Leenaars

 

 

 

8,546

 

 

 

 

 

 

 François Locoh-Donou

 

 

 

8,114

 

 

 

 

 

 

 Peter E. Raskind

 

 

 

25,708

 

 

 

 

 

 

 Eileen Serra

 

 

 

6,156

 

 

 

 

 

 

 Mayo A. Shattuck III

 

 

 

51,877

 

 

 

 

 

 

 Bradford H. Warner

 

 

 

45,101

 

 

 

 

 

 

 Catherine G. West(2)

 

 

 

22,124

 

 

 

 

 

 

 Craig Anthony Williams

 

 

 

3,266

 

 

 

 

 

 

(1)

Prior to 2013, directors were offered the opportunity to elect to forgo their cash retainers for a grant of non-qualified stock options under the 2004 Stock Incentive Plan. The outstanding options expire ten years from the date of grant. In 2013, the Committee determined to no longer include stock options as part of the director compensation program. Upon termination from Board service (other than by removal for cause), a director will have the remainder of the full option term to exercise any vested stock options.

 

(2)

Shares underlying the RSUs are pending issuance to the estate of Ms. West.

Stock Ownership Requirements

Capital One requires non-management directors to retain all shares underlying RSUs granted to them by Capital One until their service with the Board ends. The Board may grant an exception for any case where this requirement would impose a financial hardship on a director. In 2022, no directors were granted an exception to this requirement for any outstanding awards of RSUs. Our non-management director stock ownership policies also require our non-management directors to hold a number of shares of Capital One common stock with a fair market value of at least five times the director’s annual cash retainer for Board service. Directors are given five years from the date of appointment as a director to comply with the Stock Ownership Requirements. For purposes of this policy, unvested RSUs and vested deferred RSUs held by a Board member are counted as shares when determining the number of shares owned. All of the directors are currently in compliance with this requirement.

 

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EXECUTIVE COMPENSATION

 

 

Section V - Advisory Vote on Frequency of Holding an Advisory Vote to Approve Our Named Executive Officer Compensation (“Say When On Pay”) (Item 3 on Proxy Card)

 

 

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Securities Exchange Act of 1934, as amended (“Exchange Act”), we are submitting to our stockholders an advisory vote as to whether future advisory votes to approve our NEO compensation should occur every one, two or three years or abstain from voting on this proposal.

After careful consideration, our Board believes that holding a vote every year is the most appropriate policy for Capital One at this time and recommends that stockholders vote for future advisory votes to approve executive compensation every year. While Capital One’s executive compensation programs are designed to reward performance over multi-year time horizons, the Board recognizes that executive compensation disclosures are an important consideration for stockholders on an annual basis. Although it may not be feasible to immediately change the compensation program in response to an advisory vote on compensation, holding an annual advisory vote on executive compensation provides Capital One with important and regular feedback on our compensation practices to advance our goal of aligning our executives’ interests with those of our stockholders.

Stockholders will be able to specify one of four choices for this proposal on the proxy card: one year, two years, three years or abstain. Stockholders are not voting to approve or disapprove the Board’s recommendation. This advisory vote on the frequency of future advisory votes to approve executive compensation is non-binding on the Board. Notwithstanding the Board’s recommendation and the outcome of the stockholder vote, the Board may in the future decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on factors such as discussions with stockholders and the adoption of material changes to compensation programs. Following this year’s say on pay frequency vote, it is expected that the next such vote will take place at the 2029 Annual Stockholder Meeting.

***

The Board unanimously recommends that you vote to conduct future advisory votes to approve executive compensation “EVERY YEAR.”

 

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Section VI - Advisory Vote on Our Named Executive Officer Compensation (“Say On Pay”) (Item 4 on Proxy Card)

 

 

We are offering to our stockholders a non-binding advisory vote to approve our 2022 NEO compensation, pursuant to Section 14A of the Exchange Act. While the vote is non-binding, the Board values the opinions that stockholders express through their votes and in any additional dialogue. The Board will consider the outcome of the vote when making future compensation decisions.

As discussed in the “Compensation Discussion and Analysis” section beginning on page 78, our Board has provided compensation programs for the CEO and the other NEOs that are competitive with the market, performance-based, and transparent and that align with our stockholders’ interests over multiple time horizons. Our CEO’s and other NEOs’ compensation programs have consisted primarily of performance-based incentive opportunities, including multiple types of equity instruments with multi-year vesting schedules. The ultimate value of these equity-based awards is subject to Capital One’s sustained performance over time, both on an absolute basis and relative to our peers.

For the 2022 performance year, approximately 84% of the CEO’s total compensation is equity-based and at-risk to the Company’s performance and 100% of his compensation is deferred for a three-year period. As discussed under “NEO Compensation” beginning on page 106, under the 2022 NEO compensation program applicable to our other NEOs , approximately 51% of total compensation is provided through equity-based vehicles which were all at-risk based on the Company’s performance and subject to vesting over multiple time horizons.

Additional information relevant to your vote can be found in the “Compensation Discussion and Analysis” section on pages 78 to 119 and the “Named Executive Officer Compensation” section on pages 120 to 138.

We ask for your approval of the following resolution:

“Resolved, that Capital One’s stockholders hereby provide their advisory approval of the 2022 Named Executive Officer compensation as disclosed pursuant to the rules of the SEC in the Compensation Discussion and Analysis, the Summary Compensation Table, the other compensation tables and the related notes and narratives in this proxy statement.”

The Board has resolved to hold annual advisory votes to approve executive compensation. Accordingly, the next advisory vote to approve executive compensation will occur at the 2024 Annual Stockholder Meeting, unless the Board modifies its policy on the frequency of holding such advisory votes.

***

The Board unanimously recommends that you vote “FOR” approval, on an advisory basis, of our 2022 Named Executive Officer compensation as disclosed in this proxy statement.

 

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Section VII - Approval and Adoption of the Capital One Financial Corporation Seventh Amended and Restated 2004 Stock Incentive Plan (Item 5 on Proxy Card)

 

 

Overview

In 2004, the Board adopted the Capital One Financial Corporation 2004 Stock Incentive Plan (the “2004 Plan”), which was approved by the Company’s stockholders at the annual stockholder meeting held on April 29, 2004. The 2004 Plan was subsequently resubmitted for approval, and approved, by stockholders, at the annual stockholder meetings held on April 27, 2006, April 23, 2009, May 1, 2014 and May 6, 2021 in order to increase the number of shares available for issuance under the 2004 Plan and to make certain other changes as detailed in the respective proxy statement proposals for stockholder approval. The Compensation Committee of the Board approved and adopted the Fourth Amended and Restated 2004 Stock Incentive Plan effective as of January 1, 2018 to make certain non-material changes. The Fifth Amended and Restated 2004 Stock Incentive Plan was submitted for approval, and subsequently approved, by stockholders at the annual meeting held on May 2, 2019 to account for changes to Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

On January 26, 2023, the Compensation Committee adopted, subject to stockholder approval, an amended and restated version of the 2004 Plan (the “Seventh Amended and Restated 2004 Plan”) to increase the share reserve under the 2004 Plan by 14 million shares from 67 million shares to 81 million shares as reflected in the Seventh Amended and Restated 2004 Plan, which is provided in its entirety as Appendix C to this proxy statement. The Seventh Amended and Restated 2004 Plan will be approved by stockholders if a majority of the votes cast by stockholders on the proposal are voted in favor of the proposal. NYSE rules governing equity compensation plans treat abstentions as “votes cast.” Accordingly, abstentions will have the same effect as a vote against the proposal. However, broker non-votes are not considered “votes cast” and thus will have no effect on the outcome of the vote on this proposal.

Specifically, the Seventh Amended and Restated 2004 Plan makes the following changes that are subject to stockholder approval:

 

   

Provides that the maximum number of Shares (as defined below) available for issuance to participants under the 2004 Plan shall be 81 million (see Section 4.1(a) of the 2004 Plan).

The 2004 Plan, amended as of May 6, 2021, created a reserve of 67 million shares of Capital One common stock (each a “Share,” collectively, the “Shares”). The 2004 Plan Share reserve may not be sufficient to cover the awards anticipated to be granted beginning in 2024 and therefore we are asking for stockholders to approve an increase of 14 million Shares in the 2004 Plan’s Share reserve at this time.

The Compensation Committee and the Board believe that compensating Capital One executives and associates with equity awards encourages the creation of long-term stockholder value and the delivery of consistent medium- and long-term results.

The table below provides additional information regarding the number of Stock Options, Restricted Stock Units, and Performance Share Units outstanding, as well as the shares available for issuance under the 2004 Plan effective February 21, 2023:

 

         
Stock Options   Restricted
Stock Units
  Performance Share
Units
  Number of Shares
Available for
Future Issuance
  Common
Stock
Outstanding
Number of Shares
Subject to Options
Outstanding
  Weighted-
Average Exercise
Price
  Weighted-
Average
Remaining
Contractual
Term
  Number of
Units
Outstanding
  Number of Units
Outstanding
540,722   $75.12   2.7 years   7,649,917   1,283,122   9,075,765   382,204,197

 

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Section VII - Approval and Adoption of the Capital One Financial Corporation Seventh Amended and Restated 2004 Stock Incentive Plan (Item 5 on Proxy Card)

 

Summary of Material Provisions of the Seventh Amended and Restated 2004 Stock Incentive Plan

The material terms of the Seventh Amended and Restated 2004 Plan are summarized below and are qualified in their entirety by reference to the full text of the Seventh Amended and Restated 2004 Plan, which is provided as Appendix C to this proxy statement. This is a summary and it may not contain all the information that you may consider important, and thus, we encourage you to read the full text of the Seventh Amended and Restated 2004 Plan.

Types of Awards

Awards under the Seventh Amended and Restated 2004 Plan may be in the form of: (i) cash-based awards; (ii) options, which may be incentive stock options, as defined in the Code (“ISOs”) (which are tax advantageous for the participant but with respect to which Capital One does not receive a deduction) or non-qualified stock options (“NQSOs”); (iii) stock appreciation rights (“SARs”); (iv) restricted stock; (v) restricted stock units (“RSUs”); (vi) performance shares; (vii) performance units; (viii) annual incentive pool awards; or (ix) other stock-based awards (“Other Stock-Based Awards”) (collectively, “Awards”).

Duration of the Seventh Amended and Restated 2004 Plan

The Seventh Amended and Restated 2004 Plan will become effective upon stockholder approval on May 4, 2023. Unless terminated sooner as provided therein, the Seventh Amended and Restated 2004 Plan will terminate on May 6, 2031, which is ten years from the adoption of the Sixth Amended and Restated 2004 Plan at the 2021 Annual Stockholder Meeting which was held on May 6, 2021. After the Seventh Amended and Restated 2004 Plan is terminated, no new Awards may be granted under the 2004 Plan. Awards previously granted will remain outstanding in accordance with the terms and conditions of the Seventh Amended and Restated 2004 Plan and as specified under the applicable grant agreement.

Shares Available for Awards

The total number of Shares available for issuance under the Seventh Amended and Restated 2004 Plan, subject to adjustment in accordance with certain anti-dilution provisions described below, is proposed to be increased by 14 million Shares, from an aggregate amount of 67 million Shares to an aggregate amount of 81 million Shares.

Shares covered by an Award will only be counted as used under the authorized Shares set forth in the Seventh Amended and Restated 2004 Plan to the extent they are actually issued and delivered to a participant or such participant’s designated transferee and are not forfeited by the participant and returned to Capital One. Any Shares that are related to Awards which terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of Shares, which are forfeited by the participant to Capital One (including pursuant to performance based vesting conditions), which are settled in cash in lieu of Shares, or which (subject to the 2004 Plan’s prohibition on repricing, cashing out or exchanging out of the out-of-the-money stock options or stock appreciation rights) are exchanged with the Compensation Committee’s permission prior to the issuance of Shares for Awards not involving the issuance or delivery of Shares, will be available again for grant under the Seventh Amended and Restated 2004 Plan. The Compensation Committee has approved additional limitations on share usage as specified in Section 4.2(b) of the 2004 Plan, in order to align the terms of the 2004 Plan with the Company’s current practice. As approved, the following Shares covered by an Award are counted as used under the authorized Shares under the Seventh Amended and Restated 2004 Plan and may not be added to the maximum number of Shares that may be issued:

 

   

Shares that are withheld or tendered in payment of an option exercise price or repurchased by the Company with Option exercise proceeds;

 

   

Shares that are withheld or tendered to satisfy any tax withholding obligation (in connection with any option, SAR, or Other Stock-Based Award or otherwise) or Shares that are covered by a SAR (to the extent that it is settled in Shares, without regard to the number of Shares that are actually issued upon exercise); and

 

   

Shares that are withheld by the Company to satisfy any debt or other obligation owed to the Company or any Subsidiary.

 

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Section VII - Approval and Adoption of the Capital One Financial Corporation Seventh Amended and Restated 2004 Stock Incentive Plan (Item 5 on Proxy Card)

 

Except to the extent otherwise required by applicable law or stock exchange rules, the maximum number of Shares available for issuance under the Seventh Amended and Restated 2004 Plan will not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional Shares or credited as additional restricted stock, RSUs, performance shares, or Other Stock-Based Awards. The Shares available for issuance under the Seventh Amended and Restated 2004 Plan may be authorized and unissued shares or treasury shares.

Annual Award Limits

 

   

Restricted Stock and RSUs. The maximum aggregate number of Shares that may be granted as restricted stock or with respect to which RSUs may be granted in any one plan year to any one participant is 2 million plus the number of Shares under such annual award limit with respect to which restricted stock and RSUs were not granted determined as of the close of the previous plan year.

 

   

Performance Units and Performance Shares. The maximum aggregate amount that any one participant may be granted in any one plan year with respect to performance units or performance shares is 2.5 million Shares or an amount equal to the value of 2.5 million Shares, as applicable, plus the number of Shares under such annual award limit with respect to which performance units and performance shares were not granted determined as of the close of the previous plan year.

 

   

Stock Options. The maximum aggregate number of Shares with respect to which options may be granted in any one plan year to any one participant is 2.5 million, plus the number of Shares under such annual award limit with respect to which options were not granted determined as of the close of the previous plan year.

 

   

SARs. The maximum aggregate number of Shares with respect to which SARs may be granted in any one plan year to any one participant is 2.5 million plus the number of Shares under such annual award limit with respect to which SARs were not granted determined as of the close of the previous plan year.